Consolidated Income Statement

For the year ended 31 December 2024

		Year ended	Year ended
	Note	31 December 2024	31 December 2023
		€m	€m

Interest income calculated using the effective interest rate method	4	870	766
Other interest income	4	29	12
Interest income		899	778
Interest expense	4	(287)	(158)
Net interest income		612	620
Fee and commission income	5	98	86
Fee and commission expense	5	(43)	(44)
Net fee and commission income		55	42
Net trading income	6	2	3
Net other operating income		3	3
Total operating income		672	668

Administrative, staff and other expenses (excluding exceptional items)	7	(419)	(378)
Bank levy and other regulatory charges	8	(33)	(60)
Depreciation of property and equipment	23	(29)	(27)
Amortisation of intangible assets	24	(62)	(40)
*Exceptional items*
Restructuring and other costs	9	(2)	(2)
Costs incurred in relation to the Ulster Bank transaction	9	-	(31)
Total operating expenses		(545)	(538)

Operating profit before credit impairment and taxation		127	130

Credit Impairment
Loans and advances to customers	21	30	(56)
Exceptional impairment arising from deleveraging of loans	9	2	5
Total credit impairment write-back/(charge)		32	(51)

Operating profit before taxation		159	79
Taxation	10	3	(11)
Profit for the year		162	68

Attributable to:
Equity holders of the parent		119	25
Other equity holders*		43	43
*Profits attributable to Other equity holders reflects the coupons paid on the Group’s AT1 instruments in the calendar year.

Earnings per ordinary share		€ Cent	€ Cent

Basic earnings per share of €0.5 ordinary share	11	21.7	4.5
Diluted earnings per share of €0.5 ordinary share	11	21.7	4.5

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2024

		Year ended	Year ended
	Note	31 December 2024	31 December 2023
		€m	€m

Profit for the year		162	68

Items that will not be reclassified to the income statement in subsequent periods
Fair value reserve (equity instruments)
Change in fair value of equity instruments	18	4	5
Tax relating to fair value of equity instruments	10	(1)	(2)
Revaluation of property	23	(11)	(12)
Tax relating to revaluation of property	10	4	5
Other comprehensive (expense), net of tax		(4)	(4)
Total comprehensive income for the year, net of tax		158	64

Attributable to:
Equity holders of the parent		115	21
Other equity holders*		43	43

* Profits attributable to Other equity holders reflects the coupons paid on the Group’s AT1 instruments in the calendar year.

Consolidated Statement of Financial Position

As at 31 December 2024

	Note	31 December 2024	31 December 2023
		€m	€m

Assets
Cash at bank	12	72	71
Items in the course of collection	12	23	40
Loans and advances to banks	13	2,202	2,051
Derivative financial instruments	14	59	36
Other assets	15	7	60
Assets classified as held for sale	16	12	12
Debt securities	17	4,327	3,256
Equity securities	18	9	5
Prepayments and contract assets	19	63	80
Loans and advances to customers	20	21,423	21,427
Interest in associated undertakings	22	21	16
Property and equipment	23	183	205
Intangible assets	24	213	187
Deferred taxation	25	316	309
Current tax asset		2	-
Total assets		28,932	27,755

Liabilities
Deposits by banks	26	105	398
Customer accounts	27	24,120	22,966
Derivative financial instruments	14	-	1
Debt securities in issue	28	1,731	1,512
Other liabilities	29	129	148
Accruals		12	13
Current tax liability		-	1
Provisions	30	46	40
Subordinated liabilities	31	257	257
Total liabilities		26,400	25,336

Equity
Share capital	33	272	273
Share premium	33	804	804
Other reserves	33	(813)	(810)
Retained earnings	33	1,901	1,784
Shareholders’ equity		2,164	2,051
Other equity instruments	33	368	368
Total equity		2,532	2,419
Total liabilities and equity		28,932	27,755

On behalf of the Board:

Julie O’Neill

Chairperson

Eamonn Crowley

Chief Executive

Barry D’Arcy

Chief Financial Officer

Conor Ryan

Company Secretary

Consolidated Statement of Changes in Equity

For the year ended 31 December 2024

	Share capital	Share premium	Revaluation reserve*	Fair value reserve*	Other capital reserve*	Retained earnings	Attributable to equity holders of the parent	Other equity instrument	Total
	€m	€m	€m	€m	€m	€m	€m	€m	€m

Balance at 1 January 2023	273	804	49	16	(856)	1,744	2,030	368	2,398
Profit for the year	-	-	-	-	-	25	25	43	68
Other comprehensive income, net of tax (note 34)	-	-	(7)	3	-	-	(4)	-	(4)
Total comprehensive income/(expense) for the period	-	-	(7)	3	-	25	21	43	64
Transactions with owners, recorded directly in equity:
Contributions by and distributions to owners
AT1 coupon paid (note 33)	-	-	-	-	-	-	-	(43)	(43)
Reclassification of cumulative gain (net of tax) of equity instruments on disposal	-	-	-	(15)	-	15	-	-	-
Total contributions by and distributions to owners	-	-	-	(15)	-	15	-	(43)	(43)
Balance as at 31 December 2023	273	804	42	4	(856)	1,784	2,051	368	2,419

Balance at 1 January 2024	273	804	42	4	(856)	1,784	2,051	368	2,419
Profit for the year	-	-	-	-	-	119	119	43	162
Other comprehensive income, net of tax (note 34)	-	-	(7)	3	-	-	(4)	-	(4)
Total comprehensive income/(expense) for the period	-	-	(7)	3	-	119	115	43	158
Transactions with owners, recorded directly in equity:
*Contributions by and distributions to owners*
Buyback of ordinary shares	(1)	-	-	-	1	(2)	(2)	-	(2)
AT1 coupon paid (note 33)	-	-	-	-	-	-	-	(43)	(43)
Reclassification of cumulative gain (net of tax) of equity instruments on disposal	-	-	-	-	-	-	-	-	-
Total contributions by and distributions to owners	(1)	-	-	-	1	(2)	(2)	(43)	(45)

Balance as at 31 December 2024	272	804	35	7	(855)	1,901	2,164	368	2,532

* All are included in other reserves in the statement of financial position

Consolidated Statement of Cash Flows

For the year ended 31 December 2024

	31 December	31 December
	2024	2023
	€m	€m

Cash flows from operating activities

Operating profit before taxation	159	79

Adjusted for non-cash items and other adjustments:
Depreciation, amortisation and impairment of property, equipment and intangibles	91	67
Impairment (write-back)/charge on:
- Loans and advances to customers	(32)	45
Other income	(1)	(2)
Other mortgage related adjustments	70	67
Other provisions	10	6
Net interest income*	221	115
Other non-cash items*	(63)	(34)
	455	343

(Increase)/decrease in operating assets:
Derivative financial instruments	(13)	(15)
Other assets	67	10
Debt securities	35	57
Prepayments and contract assets	13	131
Loans and advances to customers	(26)	(371)


Increase/(decrease) in operating liabilities:
Deposits by banks (including central bank)	(316)	(251)
Customer accounts	1,010	1,135
Debt securities in issue	99	769
Derivative financial instruments	(1)	-
Other liabilities and accruals	(29)	13
Provisions	(8)	(41)
	831	1,437
Net cash inflow from operating activities before tax	1,286	1,780
Tax paid	(4)	(7)
Net cash inflow from operating activities	1,282	1,773

Cash flows from investing activities
Maturities of debt securities - HTC	170	728
Purchase of debt securities - HTC	(1,212)	(827)
Purchase of property and equipment	(15)	(24)
Purchase of intangible assets	(26)	(37)
Cash transferred for business combinations	-	(41)
Forward contract derivatives	-	(1,595)
Investment in associated undertakings	(3)	(7)
Sale of Visa shares	-	30
Net cash flows from investing activities	(1,086)	(1,773)

Consolidated Statement of Cash Flows (continued)

For the year ended 31 December 2024

	31 December	31 December
	2024	2023
	€m	€m
Cash flows from financing activities
Buyback of ordinary shares	(2)	-
Payment of lease liabilities	(7)	(7)
AT1 coupon payment	(43)	(43)
Interest paid on T2 capital notes	(8)	(8)
Interest paid on T2 hedging derivative	(1)	(1)
Net cash flows from financing activities	(61)	(59)

Increase/(decrease) in cash and cash equivalents	135	(59)

Analysis of changes in cash and cash equivalents
Cash and cash equivalents as at 1 January	2,162	2,221
Increase/(decrease) in cash and cash equivalents	135	(59)
Cash and cash equivalents at the end of the year	2,297	2,162

* For the year ended 31 December 2024 the Other non-cash items line item has been disaggregated

The net increase/(decrease) in cash and cash equivalents includes interest received of €965m (2023: €857m) and interest paid of €244m (2023: €117m) and dividends paid of €43m (2023: €43m).

Reconciliation of liabilities arising from financing activities

	Subordinated liabilities	Lease liabilities	Tier 2 hedging derivatives	Total
	€m	€m	€m	€m

1 January 2024	257	35	(6)	286
Financing Cashflows:
Lease liability	-	(7)	-	(7)
Interest paid on Tier 2 capital notes	(8)	-	-	(8)
Interest paid on Tier 2 hedging derivatives	-	-	(1)	(1)
Non-cash movements:
Additions to lease liabilities	-	7	-	7
Interest accrued on Tier 2 capital notes	8	-	-	8
Interest accrued on Tier 2 hedging instrument	-	-	1	1
31 December 2024	257	35	(6)	286


1 January 2023	252	38	-	290
Financing Cashflows:
Lease liability	-	(7)	-	(7)
Interest paid on Tier 2 capital notes	(8)	-	-	(8)
Interest paid on Tier 2 hedging derivatives	-	-	(1)	(1)
Non-cash movements:
Additions to lease liabilities	-	4	-	4
Interest accrued on Tier 2 capital notes	8	-	-	8
Hedge adjustment on Tier 2 capital notes	5	-	(5)	-
31 December 2023	257	35	(6)	286

Notes to the Consolidated Financial Statements

Notes	Page
1. Corporate information, basis of preparation and material accounting policies	307
2. Critical accounting estimates and judgements	326
3. Operating segments	333
4. Net interest income	334
5. Net fee and commission income	334
6. Net trading income	335
7. Administrative, staff and other expenses (excluding exceptional items)	335
8. Bank levy and other regulatory charges	336
9. Exceptional items	336
10. Taxation	337
11. Earnings per ordinary share	338
12. Cash and cash equivalents	339
13. Loans and advances to banks	339
14. Derivative financial instruments	340
15. Other assets	342
16. Assets classified as held for sale	343
17. Debt securities	343
18. Equity securities	344
19. Prepayments and contract assets	344
20. Loans and advances to customers	345
21. Impairment provisions	348
22. Interest in associated undertakings	353
23. Property and equipment	354
24. Intangible assets	356
25. Deferred taxation	357
26. Deposits by banks	358
27. Customer accounts	359
28. Debt securities in issue	359
29. Other liabilities	360
30. Provisions	360
31. Subordinated liabilities	361
32. Leases	362
33. Share capital, reserves and other equity instruments	364
34. Analysis of other comprehensive income	366
35. Measurement basis and fair values of financial instruments	367
36. Financial risk management	372
37. Capital management	391
38. Current/non-current assets and liabilities	392
39. Transfer of financial assets	392
40. Offsetting financial assets and financial liabilities	394
41. Commitments and contingencies	395
42. Related parties	396
43. Sale of loans and advances to customers	399
44. Principal subsidiary undertakings and interest in subsidiaries and structured entities	400
45. Reporting currency and exchange rates	401
46. Events after the reporting period	401

1. Corporate information, basis of preparation and material accounting policies

1.1 Corporate information

Permanent TSB Group Holdings plc (the Company) is a holding company domiciled in Ireland (registration number 474438). Its registered office is situated at 56 - 59, St. Stephen’s Green, Dublin 2, Ireland. The Company’s shares are listed on the main market of the Irish and London Stock Exchanges.

The consolidated financial statements include the financial statements of the Company and its subsidiaries (together referred to as the Group) and are prepared up to the end of the financial year, 31 December 2024.

Permanent TSB plc (PTSB), a 100% owned subsidiary of the Company, is the main trading entity of the Group which is involved in retail banking.

These consolidated financial statements for the year ended 31 December 2024 were approved by the Board and authorised for issue by the Directors on 3 March 2025.

The material accounting policies applied in the preparation of the financial statements for the year ended 31 December 2024 are set out below.

1.2 Basis of preparation

Statement of compliance

These consolidated financial statements comprise of the consolidated income statement, the consolidated statement of comprehensive income (SOCI), the consolidated statement of financial position (SOFP), the consolidated statement of changes in equity (SOCE), the consolidated statement of cash flows (SOCF), the Company SOFP, the Company SOCE, the Company SOCF and the notes to the consolidated and the Company financial statements, which have been prepared in accordance with IFRS and interpretations issued by the IFRS Interpretations Committee (IFRIC) as adopted by the EU and those parts of the Companies Act 2014 applicable to companies reporting under IFRS and EU (Credit Institutions: Financial Statements) Regulations 2015.

The accounting policies have been consistently applied by the Group entities and are consistent with the previous year.

The financial statements include the information that is described as being an integral part of the audited financial statements contained in the Directors’ Report on Remuneration and in Risk Management. Certain tables and related information in the notes to the financial statements, included in boxes and clearly identified as unaudited do not form part of the audited financial statements.

The individual financial statements of the holding company have also been prepared in accordance with IFRS and interpretations issued by IFRIC as adopted by the EU and those parts of the Companies Act 2014 applicable to companies reporting under IFRS. In accordance with section 304(2) of the Companies Act 2014, the Company is availing of the exemption from presenting its individual income statement and related notes to the AGM and from filing it with the Registrar of Companies. See note 44 for further information.

The Company’s loss after tax for the year ended 31 December 2024 was €216m (31 December 2023: profit €45m). For further information, see the Company financial statements on pages 402 to 408.

Basis of measurement

The consolidated and Company financial statements have been prepared on the historical cost basis as modified to include the fair valuation of certain financial instruments such as equity securities classified as FVOCI, derivative financial instruments, assets classified as held for sale, financial assets and liabilities designated as hedged items in qualifying fair value hedge relationships, and land and buildings accounted for using the revaluation model.

Functional and presentation currency

These financial statements are presented in Euro, which is the Company’s functional currency. Except where otherwise indicated, financial information presented in Euro has been rounded to the nearest million (m).

Use of estimates and judgements

The preparation of these consolidated and individual financial statements, in conformity with IFRS, requires Management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and related disclosures.

While the actual results may differ from the estimates made, the Directors believe that they are reasonable in the current circumstances based on the best available information at the date of the approval of these consolidated and individual financial statements.

Notes to the Consolidated Financial Statements (continued)

1. Corporate information, basis of preparation and material accounting policies (continued)

Additional information about key assumptions and judgements are disclosed in the relevant notes for the following areas including significant estimation uncertainty:

Allowance for credit impairment losses (note 21);
Deferred taxation (notes 10 and 25);
Fair value of financial instruments (note 35);
Impairment review of subsidiary undertaking (note 44).

The estimates and assumptions are reviewed on an on-going basis and where necessary are revised to reflect current conditions. The principal estimates and assumptions made by Management relate to impairment of loans and advances to customers, deferred taxation, impairment of investment in subsidiary undertakings and financial instruments.

Judgements made by Management that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 2.

1.3 Going Concern

In considering Management’s assessment of the Group’s and Company’s ability to continue as a going concern, Management considered the principal risks and uncertainties as they might pertain to the going concern assumption, particularly the liquidity, profitability, and capital position. Management considered these items in their current status, and over future projections. In doing so, Management considered each risk in turn, and the likelihood of the risk precipitating in the going concern assumptions becoming invalid over the period of assessment, being twelve months from the date of the approval of the financial statements for the year ended 31 December 2024. Management considered realistic alternatives, including downside scenarios applied by the Group and Company to test assumptions and potential outcomes.

Assessment Basis

The time that the Directors and Management have considered in evaluating the appropriateness of the going concern basis in preparing the Company consolidated financial statements for the twelve months ended 31 December 2024 is a period of twelve months from the date of approval of these financial statements (3 March 2026).

In making this assessment, the Directors and Management have considered the Group’s and Company’s 2025-2029 MTP, profitability forecasts, funding and capital resource projections. These projections include both base and stress scenarios applied by the Group and Company together with a number of factors such as the Irish Economy, Government fiscal policies, the availability of collateral to access funding through third parties and the euro-system, and on-going changes in the regulatory environment.

Economic and political environment

The Irish economy grew at a steady pace in 2024 and is expected to continue to grow into 2025. This is supported by a strong labour market, increased Government investment and increasing real wages. Consumer price inflation eased in the second half of 2024 as the ECB began to cut interest rates in June 2024 when inflation began to fall, and it is expected to continue easing in the medium term.

Further to this, the Group and Company continues to be materially reliant on Government and EU policy, and impacted by geopolitical events; such as proposed policy changes arising from the new US administration which could impact trade, FDI and public finances, uncertainty around the future trading relationship between Ireland/Eurozone and the UK and US, ongoing global conflicts, and the introduction of the global minimum corporation tax rate to a sector of the Irish market.

The Group and Company reassessed the financial impacts of the economic and political environment through the Group’s and Company’s integrated planning process and believes it is reasonably well positioned to withstand any volatility from economic events through continued management of its financial position through capital management.

Funding & Liquidity

The Group and Company continued to have sufficient liquidity throughout 2024 and continues to undertake initiatives to improve its liquidity position in the areas of deposits, collateral optimisation, and wholesale markets activity. The Directors and Management have also considered forecasts of the liquidity position over the going concern period, under a range of stress scenarios.

The Group and Company continues to hold a significant liquidity buffer at 31 December 2024 that can be easily and readily monetised in a period of stress. The Directors and Management are aware that the Group’s and Company’s ability to effectively utilise its contingent counterbalancing capacity is dependent on the underlying collateral remaining eligible. However, the Directors and Management are satisfied, based on a review of funding plans, interaction with wholesale markets and deposit trends that the required liquidity and funding will be available to the Group and Company during the period of assessment.

There are no material uncertainties, which would cast significant doubt on the ability of the Group to continue on a going concern basis over the period of assessment.

1. Corporate information, basis of preparation and material accounting policies (continued)

Profitability and Capital Adequacy

The Group and Company made a profit for the year ended 31 December 2024. Directors and Management have reviewed the Medium Term Plan and based on this, the near-term macro-economic conditions of the country, the Directors and Management are satisfied that the Group and Company are well positioned to continue to deliver profits in future years.

The Directors and Management have also considered the Group’s and Company’s forecast capital position, and a deterioration in economic conditions as might arise from an uncertainty from the Group’s and Company’s principal risks. Based on the above considerations, the Directors and Management have assessed and concluded that this does not give rise to a material uncertainty, which would cast significant doubt on the ability of the Group and Company to continue on a going concern basis for the period of assessment.

Conclusion

As required by IFRS as adopted by the EU, the Directors and Management have considered the principal risks and uncertainties facing the Group and Company as outlined above. Based on the latest and projected financial performance and position, and the options available to the Group and Company, the Directors have concluded that the Group and Company have no material uncertainties, which would cast significant doubt on the going concern assumption and have considered it appropriate to prepare the financial statements on a going concern basis.

1.4 Comparative information

The comparative information for 2023 has been prepared on a consistent basis with 2024.

1.5 Summary of material accounting policies

(i) Basis of consolidation

Subsidiaries

Subsidiaries are those entities (including special purpose entities) controlled by the Group. Control exists when the Group has:

the power, directly or indirectly, over the relevant activities of the investee, for example through voting or other rights;
exposure to, or rights to, variable returns through involvement with the investee; and
the ability to use its power over the investee to affect the Group’s return from the entity.

The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Financial statements of subsidiaries are prepared up to the financial position date. Intercompany transaction balances and unrealised gains/losses on transactions between the Group’s companies are eliminated on consolidation.

The Company carries its investment in its subsidiary undertaking at cost in the Company financial statements and reviews whether there is any indication of impairment at each reporting date. Impairment testing involves comparing the carrying value of the investment to its recoverable amount. The recoverable amount is the higher of the investment’s fair value or its VIU. If impairment occurs, this loss is recognised in the income statement.

Details of principal subsidiaries are included in note 44.

Interest in associated undertakings

Interest in associated undertakings encompass investments in entities wherein the Group has significant influence over the financial and operating policy decisions of the entity but does not have control. It is presumed that significant influence exists if the Group holds more than 20% of the voting rights in the entity unless it can be demonstrated otherwise. Conversely the Group may hold less than 20% of the voting rights but could be demonstrated to have significant influence.

Interest in associated undertakings are initially recognised at cost and subsequently accounted for using the equity method whereby the investment is increased or decreased each year by the Group’s share of the post-acquisition profit or loss of the associate. The Group’s share of the post-acquisition profit or loss of the associate is recognised in profit or loss and OCI.

The Group continues to decrease the carrying amount of the investment for its share of post-acquisition losses until the carrying amount is zero, unless the Group has incurred a legal or constructive obligation to make payments on behalf of the associate, in which case, these additional losses are provided for and a liability is recognised in this instance.

(ii) Business combinations and goodwill

(a) Business combinations

The Group accounts for business combinations, other than those under common control, using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group (see 1.5(i)).

In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs.

Notes to the Consolidated Financial Statements (continued)

1. Corporate information, basis of preparation and material accounting policies (continued)

The consideration transferred in the acquisition is generally measured at the fair value of the assets transferred, the liabilities incurred to the former owners and equity interest issued by the Group. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities (see (vii) and (a)). The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in the income statement. Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not re-measured and settlement is accounted for within equity. Otherwise, other contingent consideration is re-measured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in the income statement.

(b) Goodwill

The Group measures goodwill as the excess of (i) the consideration transferred; (ii) the amount of any non-controlling interest in the acquired entity; and (iii) acquisition date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised directly in profit or loss as a bargain purchase.

Goodwill is subject to an impairment review at least annually, and, if events or changes in circumstances indicate that the carrying amount may not be recoverable, it is written down through the income statement by the amount of any impairment loss identified in the year.

(iii) Foreign currencies

Foreign currency transactions are translated into the functional currency of each entity, being the currency of the primary environment in which the entity operates at the exchange rate prevailing at the date of the transaction or valuation where items are remeasured. Monetary assets and liabilities denominated in foreign currency are translated at the exchange rates prevailing at the reporting date. Exchange movements are recognised in the income statement. However, exchange movements arising from the translation of equity investments in respect of which an election has been made to present subsequent changes in fair value in Other Comprehensive Income (OCI) are recognised in OCI.

Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the spot exchange rate at the date on which the fair value is determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated using the spot exchange rate at the date of the transaction.

The results and financial position of the Group’s subsidiaries which have a functional currency different from Euro are translated into Euro as follows:

Assets and liabilities, including goodwill and fair value adjustments, are translated at the rates of exchange ruling at the reporting date;
Income and expenses are translated at the average exchange rates for the year; and
All resulting exchange differences are recognised in OCI and as a separate component of equity.

(iv) Recognition of income and expenses

(a) Interest and similar income and expenses

For all interest bearing financial instruments, interest income or expense is recorded using the EIR method.

The EIR is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

the gross carrying amount of the financial asset; or
the amortised cost of the financial liability.

The effective interest rate of a financial asset or financial liability is calculated on initial recognition of a financial asset or a financial liability. In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. The effective interest rate is also revised for fair value hedge adjustments at the date on which amortisation of the hedge adjustment begins. The calculation of the EIR includes transaction costs, premiums or discounts, and fees paid or received that are an integral part of the EIR. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of a financial asset or financial liability.

1. Corporate information, basis of preparation and material accounting policies (continued)

Interest income is calculated by applying the EIR to the gross carrying amount of financial assets, except for:

1. POCI financial assets, for which the original credit-adjusted EIR is applied to the amortised cost of the financial asset (the calculation of interest income does not revert to a gross basis, even if the credit risk of the asset improves); and,

2. Financial assets that are not ‘POCI’ but have subsequently become credit-impaired (or ‘Stage 3’), for which interest revenue is calculated by applying the EIR to their amortised cost (i.e. net of ECL provision). If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

Interest income and expense calculated using the effective interest method presented in the consolidated income statement includes:

interest on financial assets and financial liabilities measured at amortised cost;
the effective portion of fair value changes in qualifying hedging derivatives designated in fair value hedges of interest rate risk;
negative interest on financial liabilities measured at amortised cost;
negative interest on financial assets measured at amortised cost; and
interest expense on lease liabilities.

Other interest income presented in the consolidated income statement includes interest income on lease receivables.

(b) Fee and commission income and expense

As outlined above, fee and commission income and expense that are integral to the EIR on a financial asset or liability are included in the measurement of the EIR.

Other fees and commission income are recognised as the related services are performed. Fee and commission expenses relate mainly to transaction and service fees, which are expensed as the services are received.

(c) Net trading income/(expense)

Net trading income/(expense) comprises gains and losses relating to trading assets and trading liabilities and includes all realised and unrealised fair value changes on derivatives that do not qualify for hedge accounting, dividends and FX differences.

Dividend income is recognised when the right to receive income is established.

(d) Exceptional items

Certain items, by virtue of their nature and amount are disclosed separately in order for the user to obtain appropriate understanding of the financial information. These items would not ordinarily occur while carrying out normal business activities.

Exceptional items include gains and losses on the disposal of businesses, gain on bargain purchase in respect of business combinations, material restructuring costs and material transaction, integration and restructuring costs associated with acquisitions (including potential acquisitions).

The definition of exceptional items was refined to exclude gains and losses on material loan deleveraging post 31 December 2021. However, releases on those transactions which occurred prior to this refinement continue to be included in exceptional items is consistent with the treatment of the losses on deleveraging of loans in prior years.

(e) Bank levy and other regulatory charges

Bank levy and other regulatory charges consist of DGS fees, Central Bank Industry Funding levy, Single Resolution Fund levy, ECB fees and a bank levy.

A bank levy payable to the Government, is provided for on the occurrence of the event identified by the legislation that triggers the obligation to pay the levy.

(v) Employee Benefits

(a) Defined contribution pension plan

The Group operates a number of defined contribution pension schemes, under which the Group pays fixed contributions to a separate entity.

The contribution payable to a defined contribution plan is recorded as an expense under administration, staff and other expenses. Unpaid contributions are recorded as a liability.

Notes to the Consolidated Financial Statements (continued)

1. Corporate information, basis of preparation and material accounting policies (continued)

(b) Short term employee benefits

Short term employee benefits, such as salaries and other benefits, are accounted for on an accruals basis over the period in which the employee’s service is rendered. Bonuses are recognised where the Group has a legal or constructive obligation to employees that can be reliably measured.

(c) Termination payments

Termination benefits may be payable when employment is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within the scope of IAS 37 and involves the payment of termination benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees where the offer is irrevocable. Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.

(vi) Current and deferred taxation

Taxation comprises both current and deferred tax. Taxation is recognised as income or expense and included in the income statement except to the extent it relates to a business combination, or items recognised in either OCI or equity. In the former case, taxation is recognised in OCI while in the latter case, taxation is recognised directly in equity. In a business combination the tax amounts are recognised as identifiable assets or liabilities at the acquisition date.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years (ROI: 12.5%).

Deferred tax is provided using the liability method on all temporary differences except those arising on goodwill not deductible for tax purposes, or on initial recognition of an asset or liability in a transaction that is not a business combination and which at the time of the transaction (i) affects neither accounting nor taxable profit or loss and (ii) does not give rise to equal taxable and deductible temporary differences.

Deferred tax is measured at the tax rates enacted or substantively enacted by the reporting date that are expected to be applied to the temporary differences when they reverse.

Deferred tax liabilities and assets are offset only when they arise in the same tax reporting group and where there is the intention to settle on a net basis, or to realise the asset and settle the liability simultaneously.

DTAs and liabilities shall be offset if, and only if:

there is a legally enforceable right to set off current tax assets and liabilities; and
the DTAs and liabilities relate to income taxes levied by the same taxation authority on either:
- the same taxable entity; or
- different taxable entities which intend to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

A DTA is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. DTAs are reviewed at each reporting date and are recognised only to the extent that it is probable that the related tax benefit will be realised. Deferred tax assets and liabilities are not discounted in accordance with IAS 12.

Unrecognised DTAs are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be available against which they can be used.

(vii) Financial instruments

(a) Classification of financial assets

Financial assets of the Group currently are recorded at fair value and are classified, on initial recognition, as amortised cost designated as fair value hedges, or elected at FVOCI. Purchases and sales of financial assets are recognised on the trade date, being the date on which the Group commits to purchase or sell the asset.

With the exception of assets classified as FVTPL, the initial fair value of a financial asset includes direct and incremental transaction costs. The fair value of assets traded on an active market will be the price that would be received if an asset were to be sold in an orderly transaction between market participants at the measurement date. In the absence of an active market, the Group establishes a fair value using various valuation techniques that use observable and unobservable inputs. These include recent transactions in similar items, discounted cash flow projections, option pricing models and other valuation techniques used by market participants.

1. Corporate information, basis of preparation and material accounting policies (continued)

The classification requirements for debt and equity instruments are described below.

Debt instruments

Debt instruments, including loans and debt securities, are currently classified as amortised cost

Classification and subsequent measurement of debt instruments depend on:

(i)The Group’s business model for managing the asset; and

(ii) The cash flow characteristics of the asset.

(i) Business model assessment

The business model reflects how the Group manages the assets in order to generate cash flows. That is, whether the Group’s objective is solely to collect the contractual cash flows from the assets (HTC) or is to collect both the contractual cash flows and cash flows arising from the sale of assets (HTC&S). If neither of these is applicable, then the financial assets are classified as part of ‘other’ business model and measured at FVTPL.

The Group assesses its business model at a portfolio level based on how it manages groups of financial assets to achieve its business objectives. The observable factors considered include:

How the performance of the business model and the financial assets held within that business model are evaluated and reported to ExCo;
How risks that affect the performance of the business model are managed;
How business managers are compensated; and
The timing, frequency and volume of sales.

(ii) Cash flow characteristics assessment

The Group carries out the cash flow characteristics assessment using the contractual features of an instrument to determine if they give rise to cash flows that are consistent with a basic lending arrangement. Contractual cash flows are consistent with a basic lending arrangement if they represent cash flows that are solely payments of principal and interest (the ‘SPPI’ test). Principal, for the purpose of this test, is defined as the fair value of the financial asset at initial recognition and may change over the life of the financial asset, for example, due to repayments or amortisation of the premium/discount. Interest is defined as the consideration for the time value of money and credit risk, which are the most significant elements of interest within a lending arrangement. If the Group identifies any contractual features that could significantly modify the cash flows of the instrument such that they introduce exposures to risk or volatility that are inconsistent with a basic lending arrangement, the related financial asset is classified and measured at FVTPL.

The Group carries out the SPPI test based on an assessment of the contractual features of each product on origination and subsequently at every reporting period. Derivative instruments and equity instruments are not covered by this assessment as they are held at FVTPL (except when equities have been elected to be accounted for at FVOCI).

Based on the above assessments, the Group currently classifies its debt instruments into one category as per below:

Debt instruments measured at amortised cost

Debt instruments are measured at amortised cost if they are held within a business model whose objective is to hold the assets to collect contractual cash flows, where those cash flows represent solely payments of principal and interest. After initial measurement, debt instruments in this category are measured at amortised cost. Interest income on these instruments is recognised in interest income using the EIR method.

The EIR is the rate that discounts estimated future cash payments or receipts through the expected life of a financial asset to the gross carrying amount of a financial asset. Amortised cost is calculated by taking into account any discount or premium on acquisition, transaction costs and fees that are an integral part of the EIR.

Impairment on debt instruments measured at amortised cost is calculated using the ECL approach. Loans and debt securities measured at amortised cost are presented net of allowance for ECL in the SOFP within Loans and advances to customers and Debt securities and interest income is recognised in net interest income.

Equity instruments

Equity instruments are measured at FVTPL, unless an election is made to designate them at FVOCI upon purchase. For equity instruments measured at FVTPL, changes in fair value are recognised as part of other operating income in the income statement. The Group can elect to classify non-trading equity instruments at FVOCI. The FVOCI election is made upon initial recognition, on an instrument-by-instrument basis and once made is irrevocable. Gains and losses on these instruments including when derecognised/sold are recorded in OCI and are not subsequently reclassified to the income statement. The Group has classified certain equity instruments as FVOCI on initial recognition as per above. Dividends received are recorded in the income statement.

Notes to the Consolidated Financial Statements (continued)

1. Corporate information, basis of preparation and material accounting policies (continued)

Reclassifications

Financial assets are not reclassified subsequent to their initial recognition, except in the period after the Group changes its business model for managing financial assets.

(b) Impairment of financial assets

The Group recognises loss allowances for ECL for the following financial instruments that are not measured at FVTPL:

financial assets at amortised cost;
lease receivables;
loan commitments; and
guarantees.

Measurement

ECL is measured by the Group in a way that reflects:

an unbiased probability weighted amount that is determined by evaluating a range of possible outcomes;
the time value of money; and
reasonable and supportable information that is available without undue cost or effort at the reporting date and past events, current conditions and forecast of future economic conditions.

The amount of ECL recognised as a loss allowance depends on the change in credit risk of the financial instrument since origination and whether the credit risk on those financial instruments has increased significantly since initial recognition. In order to determine the appropriate ECL, a financial instrument is allocated to a stage dependent on the credit risk relative to when the financial instrument was originated:

Stage 1 – includes financial instruments that have not had a Significant increase in Credit Risk (SICR) since initial recognition. For these assets, 12-month ECL is recognised. 12-month ECL is the ECL that results from default events that are possible within 12 months of the reporting date. It is not the expected cash shortfalls over the 12-month period but the entire credit loss on an asset weighted by the probability that the loss will occur in the next 12 months. Therefore, all financial assets in scope will have an impairment provision equal to at least 12-month ECL;
Stage 2 – includes financial instruments that have had a SICR since initial recognition but that does not have objective evidence of impairment. For these assets, lifetime ECL is recognised, being the ECL that results from all possible default events over the expected life of the financial instrument;
Stage 3 – includes financial assets that have objective evidence of impairment at the reporting date, i.e. are credit-impaired. For these assets, lifetime ECL is recognised.

The Group has adopted an ECL framework that reflects a component approach using PD, EAD and LGD components calibrated for IFRS 9 purposes. To adequately capture life-time expected losses, the Group also models early redemptions as a separate component within the ECL calculation.

The expected cash flows included in the ECL calculation are derived from a) the loan contract b) on the disposal of collateral or c) sale of loans arising from deleveraging of NPLs which are included in the ECL calculation from the point that they meet the following three conditions:

Selling the loans becomes a recovery method that the Group expects to pursue in a default scenario;
The Group is neither legally nor practically prevented from realising the loans using the recovery method; and
The Group has reasonable and supportable information upon which to base its expectations and assumptions.

Credit loss is the difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the original EIR.

Purchased or originated credit-impaired assets (POCI)

POCI are excluded from the general 3 stage impairment model in IFRS 9. POCI assets are financial assets that are credit-impaired on initial recognition. POCI assets are recorded at fair value at original recognition and interest income is subsequently recognised on a credit-adjusted EIR basis. ECL are only recognised or released to the extent that there is a subsequent change in ECL.

Expected life

When measuring ECL, the Group must consider the maximum contractual period over which the Group is exposed to credit risk. All contractual terms should be considered when determining the expected life, including prepayment options, extension and rollover options. For most instruments, the expected life is limited to the remaining contractual life, adjusted as applicable for expected prepayments.

1. Corporate information, basis of preparation and material accounting policies (continued)

For certain revolving credit facilities that do not have a fixed maturity (e.g. credit cards and overdrafts), the expected life is estimated based on the period over which the Group is exposed to credit risk and where the credit losses would not be mitigated by Management actions.

For instruments in Stage 2 or Stage 3, loss allowances will cover ECL over the expected remaining life of the instrument.

Expert Credit Judgement

The Group’s ECL accounting framework methodology, in line with the requirements of the standard, requires the Group to use its experienced credit judgement to incorporate the estimated impact of factors not captured in the modelled ECL results, in all reporting periods.

Effective Interest Rate

The discount rate used by the Group in measuring ECL is the EIR (or ‘credit-adjusted effective interest rate’ for POCI financial assets) or an approximation thereof.

For undrawn commitments, the EIR, or an approximation thereof, is applied when recognising the financial assets resulting from the loan commitment.

Low credit risk exemption

The Group applied the low credit risk exemption to sovereign debt securities, reverse repurchase agreements, loans and advances to banks and certain intercompany positions in scope for impairment under IFRS 9.

The Group considers credit risk on a financial instrument low if it meets the following conditions:

Strong capacity by borrower to meet its contractual cash flow obligations in the near term.
Adverse changes in economic business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flow obligations.
External rating of investment grade or an internal credit rating equivalent.

These exposures are in Stage 1 with a very low credit risk requiring 12-month ECL and contributing minimally to overall ECL.

Modification Policy for Financial Assets

The Group sometimes renegotiates or otherwise modifies the contractual cash flows of loans to customers. When this happens, the Group assesses whether or not the new items are substantially different to the original terms. The Group does this by considering, among others, the following factors:

If the borrower is in financial difficulty, whether the modification merely reduces the contractual cash flows to amounts the borrower is expected to be able to pay;
Whether any substantial new items are introduced such as a profit share/equity-based return that substantially affects the risk profile of the loan;
Significant extension of the loan term when the borrower is not in financial difficulty;
Significant change in the interest rate;
Change in the currency the loan is denominated in; and
Insertion of collateral, other security or credit enhancements that significantly affect the credit risk associated with the loan.

If the terms are substantially different, the Group derecognises the original financial asset and recognises a new asset at fair value and recalculates a new EIR for the asset. The date of renegotiation of the new financial asset is consequently considered to be the date of initial recognition for impairment calculation purposes, including for the purpose of determining whether a SICR has occurred. However, the Group also assesses whether the new financial asset recognised is deemed to be credit-impaired at initial recognition, especially in circumstances where the renegotiation was driven by the debtor being unable to make the originally agreed payments. Differences in the carrying amount are also recognised in profit or loss as a gain or loss on derecognition.

If the terms are not substantially different, the renegotiation or modification does not result in derecognition, and the Group calculates the gross carrying amount based on the revised cash flows of the financial asset and recognises a modification gain or loss in profit or loss. The new gross carrying amount is recalculated by discounting the modified cash flows at the original EIR (or credit-adjusted EIR for POCI financial assets).

Write-off policy

The Group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery or on foot of a negotiated settlement. Indicators that there is no prospect of recovery include the borrower being deemed unable to pay due to their financial circumstances or the cost to be incurred in seeking recovery is likely to exceed the amount of the write-off. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier than collateral realisation. Write-off on those financial assets subject to enforcement activity will take place on conclusion of the enforcement process.

Notes to the Consolidated Financial Statements (continued)

1. Corporate information, basis of preparation and material accounting policies (continued)

In subsequent periods, any recoveries of amounts previously written off are credited to the provision for credit losses in the income statement.

Presentation of ECL allowance in the statement of financial position

The ECL on financial assets measured at amortised cost is presented as a deduction from the gross carrying amount.

Credit losses on items not recognised in the statement of financial position such as undrawn lending commitments (where the loan commitment relates to a loan already recognised as a financial asset), letters of credit and guarantees (other than financial guarantee contracts) are reported under loans and advances to customers. Credit losses on loan commitments where there is no recognised financial asset are reported under Provisions.

(c) Financial liabilities and equity

Financial liabilities are currently classified at amortised cost unless mandatorily required to be classified at FVTPL, for example derivatives. Derivative liabilities are dealt with under separate accounting policies. All of the Group’s financial liabilities, other than derivative liabilities, are classified at amortised cost.

The classification of instruments as a financial liability or an equity instrument is dependent upon the substance of the contractual arrangement. Instruments which carry a contractual obligation to deliver cash or another financial asset to another entity are classified as financial liabilities. The coupons on these instruments are recognised in the income statement as interest expense using the EIR method. Where the Group has absolute discretion in relation to the payment of coupons and repayment of principal, the instrument is classified as equity and any coupon payments are classified as distributions in the period in which they are made. If the Group purchases its own debt, it is removed from the balance sheet and the difference between the carrying amount of the liability and the consideration paid is included in other operating income, net of any costs or fees incurred.

Financial liabilities measured at amortised cost

Financial liabilities include deposits by banks (including Central Banks), customer accounts, debt securities in issue and subordinated debt. The related interest expense is recognised in net interest income.

Debt securities issued and subordinated debt issued are initially recognised on the date that they originated, while all other financial liabilities are recognised initially on the trade date. Both the date of origination and the trade date is the date the Group becomes a party to the contractual provisions of the instrument.

All financial liabilities are recognised initially at fair value, less any directly attributable transaction costs and are subsequently measured at amortised cost and the related interest expense is recognised in the income statement using the EIR method.

Equity

Financial instruments classified as equity are accounted for directly in equity less any transaction costs deducted directly from equity. Transaction costs are incremented costs directly attributable to the equity transaction that otherwise would have been avoided. Equity instruments are not subsequently re-measured. Any coupon payments on the instrument are treated as dividends and accounted for, when declared and paid as a distribution out of retained earnings. Equity instruments are issued at arm’s length.

(d) Derecognition of Financial instruments

Financial assets

The Group derecognises a financial asset when the contractual right to the cash flow from the financial asset expires, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. Control over the assets is represented by the practical ability to sell the transferred asset.

On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss.

Any cumulative gain/loss recognised in OCI in respect of equity investment securities designated as at FVOCI is not recognised in profit or loss on derecognition of such securities. Any interest in transferred financial assets that qualify for derecognition that is created or retained by the Group is recognised as a separate asset or liability.

The Group enters into transactions whereby it transfers assets recognised on its SOFP, but retains either all or substantially all of the risks and rewards of the transferred assets or a portion of them. In such cases, the transferred assets are not derecognised. Examples of such transactions are securities lending and sale-and-repurchase transactions.

1. Corporate information, basis of preparation and material accounting policies (continued)

In certain transactions, the Group retains the obligation to service the transferred financial asset for a fee. The transferred asset is derecognised if it meets the derecognition criteria. An asset or liability is recognised for the servicing contract if the servicing fee is more than adequate (asset) or is less than adequate (liability) for performing the servicing.

The Group sells loans and advances to customers to Structured Entities (SEs) that in turn issue notes to investors which are collateralised by the purchased assets. For the purpose of disclosure, a transfer of such financial assets may arise if the Group sells assets to a consolidated SE, the transfer of financial assets is from the Group (that includes the consolidated SE) to investors in the notes issued by the SE. The transfer is in the form of the Group assuming an obligation to pass cash flows from the underlying assets to investors in the notes. The securitisation is generally retained in the form of senior or subordinated tranches, or other residual interests (retained interests) however, these securitisations may also occur with entities external to the Group. Retained interests are recognised as debt securities in issue. The Group sells loans and advances to customers to SEs that are not consolidated SEs and the Group retains no interest in these assets and they are derecognised in their entirety.

Financial liabilities

The Group derecognises a financial liability when its contractual obligations are discharged, cancelled, or expired. This may happen when payment is made to the lender; the borrower legally is released from primary responsibility for the financial liability; or if there is an exchange of debt instruments with substantially different terms or a substantial modification of the terms of an existing debt instrument. Derecognition conditions are also satisfied when an entity repurchases its own debt instruments issued previously. When a financial liability is extinguished, any difference between the carrying amount of the financial liability and the consideration paid is recognised in the income statement.

(e) Determination of fair value of financial instruments and other assets

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset, or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability which is accessible to the Group.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole and is described as follows:

Level 1: Quoted market prices in active markets for identical assets or liabilities (unadjusted);
Level 2: Valuation techniques such as discounted cash flow method, comparison with similar instruments for which market observable prices exist, options pricing models, credit models and other relevant valuation models for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; or
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the change has occurred.

An analysis of the fair values of financial instruments, and further details as to how they are measured, are provided in note 35.

(viii) Derivative instruments and hedging

The Group follows the IFRS 9 model for hedge accounting.

Derivative instruments used by the Group primarily comprise interest rate swaps and currency forward rate contracts. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

For the purpose of hedge accounting, the Group engages in fair value hedges which is hedging the exposure to changes in the fair value of a recognised asset or liability in relation to interest rate risk.

Notes to the Consolidated Financial Statements (continued)

1. Corporate information, basis of preparation and material accounting policies (continued)

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:

There is ‘an economic relationship’ between the hedged item and the hedging instrument;
The effect of credit risk does not ‘dominate the value changes’ that result from that economic relationship; and
The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.

Certain derivative instruments do not fulfil the hedge accounting criteria under IFRS 9 and are consequently classified as held for trading. The fair value movement and any interest income/(expense) are included in Net trading income/(expense).

Hedges that meet all the qualifying criteria for hedge accounting are accounted for, as described below:

(a) Fair value hedges

The Group uses interest rate swaps to hedge its exposure to changes in the fair value of fixed-rate euro notes issued in respect of the EURIBOR benchmark interest rate. The Group hedges interest rate risk only to the extent of the benchmark interest rate because the changes in the fair value of a fixed-rate note issued are significantly influenced by changes in the benchmark interest rate.

Before fair value hedge accounting is applied the Group determines whether an economic relationship between the hedged item and the hedging instrument exists. This is performed by comparing the critical terms of each of the instruments and also regression analysis to assess whether the hedging instrument is expected to be highly effective in offsetting changes in the fair value of the hedged item i.e. that the fair value of the hedged item and the fair value of the hedging instrument move in opposite directions and therefore offset. The Group establishes a hedge ratio by aligning the par amount of the fixed-rate note and the notional amount of the interest rate swap designated as a hedging instrument. The Group then performs regression analysis to ensure that the hedge relationship is highly effective as per above. This analysis is also performed at reporting periods to ensure that the hedge relationship remains highly effective.

The main sources of ineffectiveness will include differences in maturities of the instruments and different interest basis calculations.

The effective portion of fair value gains on hedging derivatives and the gain or loss on the hedged item are recognised in net interest income.

For fair value hedges relating to items carried at amortised cost, any adjustment to carrying value is amortised through profit or loss over the remaining term of the hedge using the EIR method. The EIR amortisation may begin as soon as an adjustment exists and no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged. If the hedged item is derecognised, the unamortised fair value is recognised immediately in profit or loss.

(b) Credit valuation adjustment

The Group is engaged in over the counter (OTC) derivative transactions and considers whether a fair value adjustment for credit risk is required. CVA is considered to reflect the counterparty’s default risk and debit valuation adjustment (DVA) to reflect own credit risk. There is no specific guidance on the methods used to calculate CVA or DVA which creates challenges in estimation.

As a result, IFRS 13 requires entities to consider the effects of credit risk when determining a fair value measurement.

The Group mitigates its derivative positions through the use of netting and Credit Support Annex collateral arrangements. The Group do not operationally net positions. The netting and collateral arrangements may be called upon in the event of a default. This allows a counterparty to net all assets and liabilities outstanding with the defaulting counterparty, subject to the agreement when the default event occurs. The collateral arrangements in place require the counterparty in a liability position to place collateral to cover that shortfall. The Group considers and discounts the necessity for any amendments to the valuations to reflect the CVA when calculating the fair value of the derivative positions.

The Group monitors this position at every reporting period and assesses if material CVAs become appropriate to be recognised.

(ix) Cash and cash equivalents

Cash comprises cash on hand and demand deposits and cash equivalents include liquid investments that are readily convertible to known amounts of cash which are subject to an insignificant risk of change in value and with an original maturity of less than three months.

1. Corporate information, basis of preparation and material accounting policies (continued)

(x) Leases

(a) Classification of Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

the contract involves the use of an identified asset; this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified;
the Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
the Group has the right to direct the use of the asset. The Group has this right when it has the decision-making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases where the decision about how and for what purpose the asset is used is predetermined, the Group has the right to direct the use of the asset if either:
- the Group has the right to operate the asset; or
- the Group designed the asset in a way that predetermines how and for what purpose it will be used.

Unless the lease is of short-term and of low-value assets, where the Group has the right to obtain substantially all of the economic benefits from use of identified assets and has the right to direct the use of the identified asset, a right-of-use asset is recognised in property and equipment and a lease liability is recognised in other liabilities.

If a lease is assumed as part of a business combination the Group, subject to not meeting the recognition exemptions as detailed below, will recognise a right-of-use asset and a lease liability as if the lease were a new lease at the acquisition date. The right-of-use assets and lease liability are then measured consistently with the Group’s accounting policy as detailed above with the lease commencement date being the acquisition date.

As a lessee

The Group recognises a right-of-use asset (Property Plant and Equipment) and a lease liability (Other liabilities) at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is measured at the present value of the lease payments that are not paid at the commencement date, discounted using the incremental borrowing rate. Incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right of use asset in a similar economic environment. For its incremental borrowing rate, the Group uses its FTP, which comprises its base cost of funds with add-ons related to regulatory requirements, and term liquidity premium based on the slope of swap curve as a proxy of time value of money. The Group FTP is fully reflective of its funding profile and therefore considers it an appropriate reflection of the Group’s borrowing cost. For retail properties, property yield is added as a lease specific adjustment.

Lease payments included in the measurement of the lease liability comprise fixed payments, including in-substance fixed payments.

The lease liability is remeasured, if there is a change in future lease payments arising from a change in index-linked considerations, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

Short-term leases and leases of low-value assets

The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of vehicles that have a lease term of twelve months or less and leases of low-value assets, including office equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

As a lessor

When the Group acts as a lessor, it determines at lease inception, whether each lease is a finance lease or an operating lease.

Notes to the Consolidated Financial Statements (continued)

1. Corporate information, basis of preparation and material accounting policies (continued)

To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as, whether the lease is for the major part of the economic life of the asset.

When assets are held under a finance lease, the present value of the lease payments is recognised as a receivable at an amount equal to the net investment in the lease. The difference between the gross receivable and the present value of the receivable is recognised as unearned finance income. Lease income is included within net interest income and is recognised over the term of the lease reflecting a constant periodic rate of return on the net investment in the lease. Finance lease receivables are recognised within Loans and Advances to Customers and the related interest income within net interest income.

The Group applies the derecognition and impairment requirements in IFRS 9 to the net investments in the lease.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Group applies IFRS 15 to allocate the consideration in the contract.

The Group recognises lease payments received under operating leases as income, on a straight-line basis, over the lease term, as part of other income.

(xi) Property and equipment

Leasehold premises with initial lease terms of less than 50 years and all other equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation is calculated on a straight-line basis to write off the costs of such assets to their residual value over their estimated useful lives, which are assessed annually.

Freehold premises (including land) are revalued at least annually by external professional valuers. Any accumulated depreciation (on freehold premises excluding land) at the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to the revalued amount of the asset. Any resulting increase in value is credited to OCI and shown as revaluation reserves in shareholders’ equity. Any decrease in value that offsets previous increases of the same asset are charged in OCI and debited against the revaluation reserves directly in equity while all other decreases are charged to the income statement. The revalued premises, excluding the land element, are depreciated to their residual values over their estimated useful lives.

Subsequent costs are included in the asset’s carrying amount, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Property and equipment are assessed for impairment where there is an indication of impairment. Where impairment exists, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognised against the revaluation reserve to the extent it is available and any remainder is recognised in the income statement. The depreciation charge for the asset is then adjusted to reflect the asset’s revised carrying amount.

If an item of property, plant and equipment is disposed of, any gains or losses are recognised in the profit or loss before tax. If the asset being disposed of had previously been revalued then any amount in OCI relating to that asset is reclassified directly to retained earnings on disposal rather than the income statement.

1. Corporate information, basis of preparation and material accounting policies (continued)

The estimated useful lives are as follows:

Freehold Buildings	50 years
Leasehold Buildings	50 years or term of lease if less than 50 years
Office Equipment	5 – 7 years
Computer Hardware	3 – 7 years
Motor Vehicles	3 – 5 years
Fixtures and fittings	7 – 10 years

(xii) Intangible assets (other than goodwill)

Acquired computer software is stated at cost, less amortisation and provision for impairment, if any. The external costs and directly attributable internal costs of bringing to use the computer software are capitalised where it is probable that future economic benefits that exceed its cost will flow from its use over more than one year.

Capitalised computer software has a finite life and is amortised on a straight-line basis over a period of between three to seven years.

Expenditure on internally developed software is recognised as an asset when the Group is able to demonstrate: that the product is technically and commercially feasible, its intention and ability to complete the development and use the software in a manner that will generate future economic benefits, and that it can reliably measure the costs to complete the development. The capitalised costs of internally developed software include all costs directly attributable to developing the software and capitalised borrowing costs, and are amortised over its useful life. Internally developed software is stated at capitalised cost less accumulated amortisation and any accumulated impairment losses.

Software is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An asset’s carrying value is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. The estimated recoverable amount is the higher of the asset’s fair value less costs to sell or VIU.

Costs associated with research activities or maintaining computer software programmes are recognised as an expense as incurred.

(xiii) Collateral in possession

In certain circumstances, property is repossessed following foreclosure on loans that are in default. When a property is repossessed, the associated loan relating to that property is derecognised and any provision on that loan is reversed. On initial recognition the collateral in possession is valued at its fair value.

Subsequent to initial recognition, the property is carried at the lower of its cost and net realisable value.

(xiv) Assets and liabilities classified as held for sale

An asset or a disposal group is classified as held for sale if the following criteria are met:

Its carrying value will be recovered principally through sale rather than continuing use;
It is available for immediate sale; and
The sale is highly probable within the next 12 months.

When assets (or disposal groups), other than financial assets as classified under IFRS 9, or rights under an insurance contract, are initially classified as held for sale, they are measured at the lower of the carrying amount or fair value less costs to sell at the date of reclassification.

Impairment losses subsequent to classification of such assets (or disposal groups) are recognised in the income statement. Increases in fair value less costs to sell of such assets (or disposal groups) that have been classified as held for sale are recognised in the income statement to the extent that the increase is not in excess of any cumulative loss previously recognised in respect of the asset (or disposal group).

Where the above conditions cease to be met, the assets (or disposal group) are reclassified out of held for sale and included under the appropriate SOFP classifications.

Financial assets within the scope of IFRS 9, DTAs and income taxes within the scope of IAS 12 continue to be measured in accordance with these standards.

Notes to the Consolidated Financial Statements (continued)

1. Corporate information, basis of preparation and material accounting policies (continued)

(xv) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

A restructuring provision is recognised when there is an approved detailed and formal Restructuring Plan, and the restructuring either has commenced or has been publicly announced. Future operating losses are not permitted to be recognised.

Present obligations arising under onerous contracts are recognised and measured as provisions at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. An onerous contract is a contract in which the unavoidable cost of meeting the obligation under the contract exceeds the economic benefits expected to be received under it.

Contingent liabilities are either possible obligations that arise from past events whose existence is dependent on whether some uncertain future events occur which are not wholly within the control of the entity or are a present obligation that arises from a past event but is not recognised because:

It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
The amount of the obligation cannot be measured with sufficient reliability.

Contingent liabilities are not recognised but are disclosed unless the probability of their occurrence is remote.

Financial guarantees are contracts that require the Group to make specified payments to reimburse the holder for a loss that it incurs because a specified debtor fails to make payment when it is due in accordance with the terms of a debt instrument.

Loan commitments are firm commitments to provide credit under pre-specified terms and conditions.

The maximum exposure to credit loss under commitments is the contractual amount of the instrument in the event of non-performance by the other party where all counter claims, collateral or security prove worthless. The transfer of economic resources is uncertain and cannot be reasonably measured to be recognised on the SOFP.

ECL held against loan commitments are recognised in Provisions except where the loan commitment relates to a loan already recognised as a financial asset. In this case the ECL is recognised in Loans and advances to customers.

Financial guarantees issued or commitments to provide a loan at a below-market interest rate are initially measured at fair value. Subsequently, they are measured at the higher of the loss allowance determined in accordance with IFRS 9 and the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of IFRS 15.

Other loan commitments issued are measured at the sum of (i) the loss allowance determined in accordance with IFRS 9 and (ii) the amount of any fees received, less, if the commitment is unlikely to result in a specific lending arrangement, the cumulative amount of income recognised. Derecognition policies in section (vii) (d) above are applied to loan commitments issued and held.

The Group has issued no loan commitments that are measured at FVTPL.

(xvi) Dividends

Final dividends on ordinary shares are recognised in equity in the period in which they are approved by the Company’s shareholders. Interim dividends are recognised in equity in the period in which they are paid.

(xvii) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components, whose operating results are reviewed regularly by the Group Executive Committee (being the chief operating decision maker (CODM)) to make decisions about resources allocated to each segment and assess its performance, and for which discrete financial information is available.

1. Corporate information, basis of preparation and material accounting policies (continued)

(xviii) Sales and repurchase agreements

Financial assets may be lent for a fee or sold subject to a commitment to repurchase them (“repos”). Such assets are retained on the SOFP when substantially all the risks and rewards of ownership remain with the Group. The assets are reclassified when the transferee has the right by contract to sell or repledge the collateral. The liability to the counterparty is included separately on the SOFP as appropriate in either Deposits by banks or Customer accounts depending on whether the counterparty is a bank or not.

Similarly, where financial assets are purchased with a commitment to resell (“reverse repos”), or where the Group borrows financial assets but does not acquire the risks and rewards of ownership, the transactions are treated as collateralised loans, and the financial assets are not included in the SOFP. The collateralised loan asset is included separately on the SOFP as appropriate in either Loans and advances to banks or Loans and advances to customers.

The difference between the sale and repurchase price is recognised in net interest income over the life of the agreements using the EIR.

In certain circumstances, the Group pledges collateral in respect of liabilities or borrowings. Collateral pledged in the form of securities or loans and advances continues to be recorded on the SOFP. Collateral placed in the form of cash is recorded in loans and advances to banks or customers. Any interest receivable arising is recorded as interest income.

(xix) Collateral

The Group enters into master agreements with counterparties to ensure that in the event of a default, all amounts outstanding with those counterparties will be settled on a net basis. The Group obtains collateral in respect of customer liabilities where this is considered appropriate. The collateral normally takes the form of a lien over the customers’ assets and gives the Group a claim on these assets for both existing and future liabilities. The collateral is not recorded on the Group’s SOFP.

The Group also receives collateral in the form of cash or securities in respect of other credit instruments, such as sale-and-repurchase contracts and derivative contracts, in order to reduce credit risk. Collateral received in the form of securities is not recorded on the SOFP. Collateral received in the form of cash is recorded on the SOFP, with a corresponding liability recognised within deposits from banks or deposits from customers. Any interest payable arising is recorded as interest expense.

(xx) Offsetting

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is currently a legally enforceable right of set off and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. No impairment loss allowance for ECL is recognised on a financial asset, or portion thereof, which has been offset.

Notes to the Consolidated Financial Statements (continued)

1. Corporate information, basis of preparation and material accounting policies (continued)

1.6 Application of new and revised IFRS

In 2024, the Group assessed the impact of new and revised pronouncement of IFRSs which took effect during the year. The changes to IFRSs during 2024 did not have material impact on the Group’s financial statements. The Group has not early adopted any of the changes described below.

1.7 Impact of other accounting standards with effective periods beginning on or after 1 January 2024.

The following table outlines the new pronouncements coming into effect for accounting periods on or after 1 January 2024 and did not have a significant impact on the financial statements.

Accounting Standard Update	Description of Change	Key impacts for PTSB	Effective Date
IAS 1 – Classification of Liabilities as Current or Non-current	Clarifies that the classification of liabilities as current or non-current should be based on rights that exist at the end of the reporting period.	This amendment has had no material impact on current or future reporting.	Annual periods beginning on or after 1 January 2024.
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)	Clarifies how to measure sales in a sale and lease back agreement. The aim is to ensure it meets the requirements of IFRS15 revenue recognition.	This amendment has had no material impact on current or future reporting.	Annual periods beginning on or after 1 January 2024.
Non-current Liabilities with Covenants (Amendments to IAS 1)	Clarifies how conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability.	This amendment has had no material impact on current or future reporting.	Annual periods beginning on or after 1 January 2024.
Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)	Provides disclosure requirements, and ‘signposts’ within existing disclosure requirements, that ask entities to provide qualitative and quantitative information about supplier finance arrangements.	This amendment has had no material impact on current or future reporting.	Annual periods beginning on or after 1 January 2024.

1.8 Impact of other accounting standards with effective periods beginning on or after 1 January 2025.

The following table outlines the new pronouncements coming into effect for accounting periods on or after 1 January 2025 and are not deemed to have a significant impact on the financial statements with the exception of IFRS 18 impacts detailed below.

Accounting Standard Update	Description of Change	Key impacts for PTSB	Effective Date

Lack of Exchangeability (Amendments to IAS 21)	Provides guidance to specify when a currency is exchangeable and how to determine the exchange rate when it is not.	This amendment is expected to have no material impact on current or future reporting.	Annual periods beginning on or after 1 January 2025. Not yet endorsed by the EU.
Amendments IFRS 9 and IFRS 7 regarding the classification and measurement of financial instruments	The amendments address matters identified during the post-implementation review of the classification and measurement requirements of IFRS 9 Financial Instruments.	The potential impact on future reporting is expected to be minor. Further consideration will be given to the amendment closer to the first applicable reporting period if it is adopted by the EU.	Annual reporting periods beginning on or after 1 January 2026. Not yet endorsed by the EU.

1. Corporate information, basis of preparation and material accounting policies (continued)

Accounting Standard Update	Description of Change	Key impacts for PTSB	Effective Date

IFRS 18 Presentation and Disclosures in Financial Statements	IFRS 18 includes requirements for all entities applying IFRS for the presentation and disclosure of information in financial statements.	This amendment is likely to have a material impact on future reporting and we have begun analysing its potential impact.	Applicable to annual reporting periods beginning on or after 1 January 2027. Not yet endorsed for use in the EU. Known impacts of IFRS 18 i) results of associates to be shown outside operating profit ii) cash flow statement to start with operating profit iii) management defined performance measures to be disclosed in a single note to the financial statements. Enhanced guidance is provided on how to group items in the financial statements and the impact of this and other changes are still being considered.
IFRS 19 Subsidiaries without Public Accountability: Disclosures	IFRS 19 specifies the disclosure requirements an eligible subsidiary is permitted to apply instead of the disclosure requirements in other IFRS Accounting Standards.	This amendment is expected to have no material impact on current or future reporting.	Applicable to annual reporting periods beginning on or after 1 January 2027. Not yet endorsed for use in the EU.
Annual Improvements to IFRS Accounting Standards — Volume 11	The pronouncement comprises the following amendments: IFRS 1: Hedge accounting by a first-time adopter IFRS 7: Gain or loss on derecognition IFRS 7: Disclosure of deferred difference between fair value and transaction price IFRS 7: Introduction and credit risk disclosures IFRS 9: Lessee derecognition of lease liabilities IFRS 9: Transaction price IFRS 10: Determination of a ‘de facto agent’ IAS 7: Cost method	The potential impact on future reporting is expected to be minor. Further consideration will be given to the amendment closer to the first applicable reporting period if it is adopted by the EU.	Applicable to annual reporting periods beginning on or after 1 January 2026. Not yet endorsed for use in the EU.

Notes to the Consolidated Financial Statements (continued)

2. Critical accounting estimates and judgements

The preparation of these consolidated financial statements, in conformity with IFRS, requires Management to make assumptions, estimates and judgements that affect the reported amounts of income, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that may require a material adjustment to the carrying amount of the assets or liabilities affected in future periods.

The current economic climate, with interest rates remaining high and continued cost inflation, elevates the uncertainty associated with judgements, estimates and assumptions made by Management. The Irish economy demonstrated resilience in the current economic climate in 2024. The results of the actions taken by the Government, EBA and CBI point toward a positive trajectory. The Directors and Management, however, remain cautious and risk remains in the medium to long-term that the Irish Banking sector will continue to face challenges, particularly due to higher capital requirements and new and emerging risks.

Assumptions, estimates and judgements are revised on an ongoing basis and where necessary are revised to reflect current conditions and updated information.

Critical accounting estimates and judgements made by Management in applying accounting policies are set out below.

(a) Allowance for credit losses under IFRS 9

IFRS 9 requires an impairment allowance to be recorded for ECL on financial assets regardless of whether there has been an actual loss event. There is a requirement to track and assess changes in credit risk on financial instruments since origination and determine whether the credit risk on those financial instruments has increased significantly since initial recognition.

The following concepts introduce significant judgement within impairment and have a significant impact on the level of ECL allowances.

Determination of significant increase in credit risk (SICR)

The Group’s criteria for assessing whether there has been a significant increase in credit risk can cause some volatility in the classification of performing exposures and amount of the recognised ECL allowances in any accounting period. This is because in line with IFRS 9, Stage 1 loans require a 12-month ECL whereas a lifetime ECL is recognised for Stage 2 loans.

Criteria to determine whether a significant increase in credit risk has occurred at the reporting date are set out in section 3.1, Risk management.

Forward Looking Information (FLI)

The Group has adopted an ECL framework that reflects a component approach using PD, EAD and LGD components calibrated for IFRS 9 purposes. To adequately capture lifetime ECL, the Group also modelled early redemptions as a separate component within the ECL calculation.

Judgement is combined with statistical evidence in determining which forward-looking variables are relevant for the Group’s loan portfolios and in determining the extent by which through-the-cycle parameters should be adjusted for FLI to determine point-in-time parameters.

Changes in FLI variables applied to convert through-the-cycle PD and LGD into point-in-time parameters can either increase or decrease ECL impairment allowances in a particular accounting period. On update, increases in the level of optimism in the FLI variables will cause a decrease in ECL while increases in the level of pessimism in the FLI variables will cause an increase in ECL. These movements could be significant in the accounting period of update.

In its calculation of ECL allowance, the Group considers multiple scenarios and possible outcomes together with their probability of occurrence. Scenarios are designed to capture a range of outcomes. Each macroeconomic scenario in the Group’s ECL calculation includes a projection of all relevant macroeconomic variables applied in the models for a five-year period, subsequently reverting to long-run averages.

The Group’s approach applies extreme-but-plausible economic scenarios (i.e., underpinned by historical evidence) to estimate the distribution of ECL to which the Group is exposed. Using statistical techniques combined with expert credit judgement the Group then formulates an unbiased probability weighted estimate of ECL at the reporting date. The Group’s approach to economic scenario development and application will be reviewed during the redevelopment of the Group’s IFRS 9 model suite over the course of the next 12 - 18 months.

2. Critical accounting estimates and judgements (continued)

Three scenarios are considered in the Group’s calculation of ECL allowance at the reporting date. The base scenario is used for financial planning purposes. The Group considers one scenario that represents a macroeconomic environment that is more favourable to the central scenario and one scenario that represents a macroeconomic environment that is less favourable to the central scenario. Macroeconomic scenarios and associated weights are reviewed by the Asset and Liability Committee (“ALCo”) before approval for use by the Board Risk and Compliance committee.

The table below compares the key macroeconomic variables and probability weightings used for the year-end ECL process to those used at December 2023. Macroeconomic input parameters were last updated in December 2024.

The updated Base Case scenario reflects marginally higher unemployment forecasts and a worsening GDP outlook vs previous year, due to headwinds in the global economy as a result of geopolitical pressures. The Upside and Downside scenarios are updated to present extreme ‘1-in-20’ scenarios relative to the updated Base scenario. Given the severity of these scenarios (5th Percentile upside and 95th Percentile downside), their combination captures the macroeconomic uncertainty arising from the current economic environment.

	31 December 2024				31 December 2023
		Base Case	Upside Scenario	Downside Scenario		Base Case	Upside Scenario	Downside Scenario
	Average value over Year 1	Average value over the forecast period	Average value for the forecast period	Average value over the forecast period	Average value over Year 1	Average value over the forecast period	Average value over the forecast period	Average value over the forecast period

Percentile		50th	5th	95th		50th	5th	95th
Scenario Probability Weighting		54%	23%	23%		54%	23%	23%

Irish Residential House Prices	3%	2%	12%	-10%	2%	2%	12%	-10%
Irish Unemployment	6%	6%	4%	12%	6%	5%	4%	11%
Irish GDP	1%	2%	5%	-2%	3%	3%	6%	-2%
Consumer Price Index	2%	2%	2%	4%	3%	2%	2%	4%
ECB Base Rate	2%	2%	1%	4%	4%	3%	1%	4%

The macroeconomic scenarios used at the reporting date are described below.

Base scenario

Global inflationary forces have continued to ease through 2024, freeing all major monetary authorities to cut interest rates in the second half of the year. A soft landing in the global economy, with unemployment and default rates remaining subdued compared to previous cycles, and a steady recovery in growth, provided a more attractive backdrop for the global economy in 2024. However, the change in the political leadership of the world’s largest economy, and a radically different approach to international trade agreements presents a new and significant threat to the global macro-economic outlook.

A more benign interest rate environment and the increased number of high wage earners in the economy means that house prices are expected to see upward pressure, albeit at a much more modest rate. Underlying driving forces, such as a) decade of under supply of housing, b) strong population growth through inward migration and population dynamics, c) record rental values and d) exceptionally strong construction price inflation, are expected to support property prices in the medium term.

Unemployment is expected to increase over the forecast period due to a weakened outlook in global trade. Average GDP growth over the forecast period reflects the uptick in unemployment.

Upside scenario

The upside scenario reflects a much stronger outcome for the Irish economy than in the base scenario. While there is both historical context and statistical backing to the key forecasts it is a positive extremity.

Consistent with the longer-term nominal house price average gain of 9.3% since 1970 and 6.4% globally during that period, the HPI forecast for the extreme positive scenario, puts average HPI increases at 12% per annum. Average GDP growth over the forecast period is 5%, which is higher than the average of 3.9% for the Irish economy since 1950. The outlook reflects an extreme positive of effective full employment. Substantially below trend CPI growth returns in the Irish economy over the forecast horizon, with inflation trends remaining highly supportive of economic growth.

Notes to the Consolidated Financial Statements (continued)

2. Critical accounting estimates and judgements (continued)

Downside scenario

The Downside scenario is an extreme negative scenario backed by Irish historical context and international comparatives. The scenario captures a statistical extreme in unemployment, GDP and HPI, while maintaining credibility as a single scenario. In this scenario, there is a prolonged period of unemployment, averaging at 12% per annum over the forecast period. Five years of sub normal growth across the forecast horizon shows a sharp reversal from current expected growth levels and is significantly below the 3.9% average GDP growth seen in the Irish economy since 1950. The threat of CPI moving ahead at a much faster pace than expected, is a key feature of this 1 in 20 scenario for this period, acknowledging the more fragmented global supply chain and the larger scale deglobalisation impact. House price decline reflects worsened conditions.

Scenario application

Determining probability weightings of the scenarios and forecasting FLI in respect of those scenarios requires a significant degree of Management judgement. The reported ECL allowance is impacted by the probability weighting attributed to each macroeconomic scenario.

If the Group were to only use its Base Case Scenario for the measurement of ECL for the secured mortgage portfolio, excluding overlay adjustments to modelled ECL outcomes, the ECL impairment allowance would be €95m less than reported at 31 December 2024.

Similarly, excluding overlay adjustments to modelled ECL outcomes, if the Group were to only apply its Upside Scenario for the measurement of ECL for the secured mortgage portfolio, the ECL impairment allowance would be €107m less than reported at 31 December 2024. Whereas, if the Group were to only use its Downside Scenario, the ECL impairment allowance would be €309m greater than reported at 31 December 2024.

The BAC review the adequacy of ECL allowance on a half-yearly basis. Given the relative sizes of the portfolios, the key judgemental area for the Group is in relation to the level of ECL calculated for the residential mortgage portfolio.

Management judgement has been incorporated into the Group’s impairment measurement process for the period and includes:

Criteria applied to determine significant increase in credit risk;
Management judgement in impairment model parameters; and
Overlay adjustments to modelled ECL outcomes.

Criteria applied to determine significant increase in credit risk

The Group considers both quantitative and qualitative measures, including other reasonable and supportable information that would not otherwise be considered, in the assessment of whether a significant increase in credit risk (SICR) has arisen. Further details on the Group’s approach to assessing SICR are set out in section 3.1, Risk management; Loan impairment.

At December 2024, a collective risk assessment has been conducted on a cohort of customers who could be disproportionately impacted by headwinds at the reporting date. This assessment has resulted in a management decision to classify €225 million of stage 1 residential mortgage loans as stage 2, with a corresponding €2 million uplift to modelled expected credit loss allowances. This does not form part of management’s judgement in impairment model parameters or overlay adjustments.

Management judgement applied to impairment model parameters

At December 2024, the residential mortgage LGD parameter utilised in the ECL calculation was updated to reflect management judgement in respect of the future resolution profile of the non-performing loans and observed model sensitivity to intense house price growth during the year (+€44m). Changes in individual exposure LGD does not impact staging classification. The secured LGD model is scheduled for redevelopment in 2025.

Overlay adjustments to modelled ECL outcomes

Overlay adjustments approved for 31 December 2024 (with 2023 comparison where applicable), are set out below and categorised as follows:

Non-performing exposures: Overlay to recognise risk of elevated loss outcomes for aged default cohorts.
Model to be built: Application of minimum provision coverage floors where appropriate models are not yet available.
Model Limitations: Overlay to recognise limitations associated with the Group’s current IFRS 9 models.
Forward-Looking Outlook: ECL adjustments required due to emerging risks or headwinds not captured in modelled results.

2. Critical accounting estimates and judgements (continued)

Overlay adjustments to modelled ECL outcomes

	31 December 2024	31 December 2023
	€m	€m

Non-performing exposures	35	50
Model to be built	10	13
Model limitations	26	29
Forward-looking outlook	21	44
Total	92	136

Non-performing Exposures (NPE)

An overlay of €35m is in place in respect of Stage 3 residential mortgage loans that are in default for a prolonged period and for which Management consider the modelled impairment to be insufficient to cover resolution. The overlay is based on the Group’s assumptions around collateral realisation on defaulted assets in respect of coverage levels on non-performing loans based on years in default. Given the nature of this overlay, there is no impact on the Group’s SICR assessment and assessment is determined by level of non-performing loans within loans and advances to customers at 31 December 2024. This overlay has reduced from December 2023 due to the Glas III portfolio loan sale and paydown during the year. The requirement for this overlay will be removed upon the implementation of a redeveloped residential mortgage LGD model, which will consider the impact of NPE vintage on loss outcomes, scheduled for H2 2025.

Model to be Built

A €10m overlay has been applied in respect of portfolios which were acquired from Ulster Bank in 2023. This overlay incorporates minimum provision coverage floors, based on pre-determined benchmarks. Given the nature of these acquisitions, the overlay is applied at portfolio level which does not give rise to a staging adjustment. The development of specific impairment models for these portfolios, planned for H1 2026, is expected to remove the requirement for this overlay.

Model Limitations

Construction of the Group’s IFRS9 models was based on a single economic cycle covering a period of low and stable inflation rates. Management is of the view that the modelled impairment allowance may not fully reflect expected credit losses for certain cohorts of borrowers. At the reporting date, a €26m management overlay is held for this risk. The requirement for this overlay is expected to reduce throughout 2025 and 2026 as key milestones in the IFRS 9 Provision Models Programme are met.

Forward-Looking Outlook

The bank is forward-looking in its risk identification process to ensure emerging risks are identified. It acknowledges that not all forward-looking adjustments can be considered in IFRS9 models and as a result will require reassessment on a regular basis.

A €21m overlay to reflect the uncertainty associated with the current economic headwinds comprises of:

€15m in respect of specific commercial sectors where management consider heighted default risk associated with emerging risks not captured within modelled results (31 December 2023: €17m) with impacted obligations and associated overlay reported as Stage 2;
€3m in respect of performing consumer accounts to reflect recent default and recovery experience not yet captured within modelled ECL (31 December 2023: €10m). The ongoing requirement for this overlay will be assessed as part of the unsecured model redevelopment scheduled for 2026; and
€3m in respect of Stage 1 residential mortgage accounts to reflect the potential for geopolitical headwinds to further stress less seasoned mortgage exposures.
An overlay of €17m held at December 2023 to reflect cost of living challenges associated with the increased interest rate environment, is no longer deemed necessary based on observed performance and current point in the interest rate cycle.

(b) Deferred taxation

At 31 December 2024, the Group had a net deferred tax asset of €316m (31 December 2023: €309m), see note 25 for further details.

Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. The recognition of a deferred tax asset relies on Management’s judgements surrounding the probability and adequacy of future taxable profits and the reversals of existing taxable temporary differences.

Notes to the Consolidated Financial Statements (continued)

2. Critical accounting estimates and judgements (continued)

The most important judgement relates to Management’s assessment of the recoverability of the deferred tax asset relating to carried forward tax losses, being €323m at 31 December 2024. It should be noted that the full deferred tax asset on tax losses relates to tax losses generated in the PTSB legal entity (i.e. no deferred tax asset is being recognised on tax losses carried forward in any other Group company).

The assessment of recoverability of this asset requires significant judgements to be made about the projection of long-term profitability because of the period over which recovery extends. In addition, given PTSB’s history of recent losses, in accordance with IAS 12, there must be convincing other evidence to underpin this assessment.

In making the assessment, the Board considered the following factors:

The current macroeconomic environment and external forecasts for the Irish economy particularly in light of the geopolitical environment, the forecast interest rate movements and inflationary risks;
The current expected trajectory of the Group’s financial performance;
The impairment performance;
The Group’s projected liquidity and capital position;
The absolute level of deferred tax assets on tax losses compared to the Group’s equity;
The quantum of profits required to be generated to utilise the tax losses and the extended period of time over which these profits are projected to be generated;
The challenge of forecasting over an extended period and in particular taking account of external factors such as global political uncertainty, the level of competition and disruptors to the market and market size;
Consideration of the assumptions underpinning the Group’s financial projections (on which analysis of the recoverability of the deferred tax asset on tax losses are based). The key relevant assumptions considered being:
- No material change to the Group’s business activities in the medium term;
- Further progress in addressing the Group’s non-performing assets;
- Net Interest Margin, is also expected to be positively impacted by the evolution of the Group’s lending book as new lending volumes are added and lower yielding tracker mortgages pay down; however, further material reductions in cost of funds are considered unlikely;
- Continued focus on cost management; and;
- The cost of risk will continue its return to normalised levels reflecting the Group’s assessment of the medium to long term average; and
Consideration of forecasting risks, including sensitivity analysis on the financial projections, such sensitivity analysis including the effect of higher than expected impairments, cost of funds or operating expenditure, and lower than expected asset yields, new lending or ECB rates.

Taking the above factors into account, and in the absence of any expiry date for the utilisation of carried forward tax losses in Ireland, the Board have concluded that it is more likely than not that there will be sufficient taxable profits against which the losses can be utilised and on the basis of the assessment above, continue to recognise €323m of a deferred tax asset on tax losses on the statement of financial position as at 31 December 2024.

In this regard, the Group has carried out an exercise to determine the likely number of years required to utilise the deferred tax asset arising on tax losses carried forward. Based on the Group’s latest forecast plans to 2029 and assuming a level of profitability growth consistent with GDP growth of approximately 2.5%, it will take c. 12 years for the deferred tax asset on tax losses of €323m to be utilised. A level of profitability consistent with GDP growth continues to be considered by Management to be appropriate given the Group’s primarily domestic retail focus and the expectation arising therefrom that, over the long-term, the Group’s performance would be expected to broadly track the performance of the Irish economy, with modest GDP growth expected over the medium term. Management are of the view that a long-term assumed growth rate of 2.5% is not unreasonable in this context.

IFRS does not allow for the deferred tax asset recognised to be discounted notwithstanding that it is likely to take a number of years for it to be recovered.

The expected period of time to full utilisation of the deferred tax asset is broadly in line with that at 31 December 2023 where the DTA was expected to be utilised by 2034. Assumptions underpinning the deferred tax asset recoverability analysis are broadly in line with prior periods.

2. Critical accounting estimates and judgements (continued)

It should be noted that Management make certain judgements in the process of applying the Group’s accounting policies which may impact on amounts recognised in the financial statements and consequently on taxable profits and the utilisation of tax losses. As set out in note 25, analysis carried out demonstrates that were certain adverse events to arise (see below for further detail of the adverse events considered) it continues to be Management’s view that there would be sufficient future taxable profits against which the full quantum of tax losses carried forward could be utilised, albeit that the period of time over which such utilisation would occur would be extended.

It should be further noted that the analysis of the estimated utilisation of the deferred tax asset arising on tax losses carried forward in PTSB is based on the current business model of the Group.

The recognition of this asset is dependent on the Group earning sufficient profits to utilise the tax losses. The quantum of and timing of these profits is a source of significant estimation uncertainty. However, as a principle, the Group is expecting to be profitable in the medium term. Consequently, the key uncertainty relates principally to the time period over which these profits will be earned. Whilst the Group may be more or less profitable in certain periods owing to various factors such as the interest rate environment, loan loss provisions, operating costs and the regulatory environment, Management expect that, notwithstanding these, the Group will be profitable over the long term. Consequently, any change to these factors which would ultimately impact on profitability, are highly subjective, but will only impact on the time period over which this asset is recovered.

As set out above, in assessing the appropriateness of recognising a deferred tax asset on tax losses carried forward, Management has considered the impact of various stress case scenarios on the period of recoverability. The three scenarios identified as having potentially significant implications for the deferred tax asset recoverability are (i) adverse changes in the interest rate environment, (ii) increased impairment charges and (iii) increases in operating costs. These stress case scenarios are intended to simulate a situation where there is an economic downturn. If any one of the stress case scenarios were to occur, within a reasonably possible range, it is our expectation that the time period over which these assets might be recovered could extend by 1 year. If all adverse assumptions were to arise the period of recoverability would be extended by 5 years (i.e. full utilisation by 2041). However, Management consider this scenario unlikely. Changes in these assumptions are most impacted by changes to house prices and unemployment, which represent the majority of any expected stress loss which could occur. This position will continue to be reviewed for each reporting period; however, much of this estimation uncertainty may not be resolved for a number of years. However, as noted, based on the Group’s latest forecast plan, it is Management estimate that the expected time period for recovery of the deferred tax asset on tax losses to be 12 years, i.e. full utilisation is expected by 2036.

(c) Fair Value of Financial instruments

The Group’s accounting policy for the determination of fair value of financial instruments is set out in note 1(vii)(e). The best evidence of fair value is quoted prices in an active market. The absence of quoted prices increases reliance on valuation techniques and requires the use of judgement in the estimation of fair value. This judgement includes evaluating available market data, determining the expected cash flows for the instruments, as well as identifying and applying an appropriate discount rate and credit spread.

Valuation techniques that rely on non-observable data require a higher level of Management judgement in estimating the fair value compared to those based on observable data.

The quality of market data, valuation techniques and other inputs into the valuation models used are subject to internal review and approval.

The Group carries certain financial assets at fair value. In estimating the fair value of these assets and derivatives, the Group seeks to use quoted market prices (level 1). Where quoted market prices are not available, the Group uses valuation techniques which use observable inputs including quoted prices of financial instruments themselves or quoted prices of similar instruments – in either active or inactive markets (level 2) but where this is not possible, a degree of judgement is used (level 3). Such judgement considerations typically include items such as interest rate yield curves, equity prices, option volatilities and currency rates.

Further details of the fair value of financial assets and liabilities are set out in Note 35.

Notes to the Consolidated Financial Statements (continued)

2. Critical accounting estimates and judgements (continued)

(d) Impairment review of its subsidiary undertaking

The Company carries its investment in its subsidiary undertaking at cost and reviews whether there is any indication of impairment at each reporting date. Impairment testing involves comparing the carrying value of the investment to its recoverable amount. The recoverable amount is the higher of the investment’s fair value or its value-in-use (VIU).

An impairment charge arises if the carrying value exceeds the recoverable amount and where the carrying value is not supported by the estimated discounted future cash flows of the underlying business. Management note that the market capitalisation of the Group is lower than its net assets. It is noted that the market capitalization does not include a control premium. The recoverable amount of the investment is the higher of its fair value less costs to sell or it’s VIU. The carrying value of the investment in PTSB before adjusting for impairment was €2,346m and recoverable amount based on the VIU was €2,083m resulting in a €263m impairment charge for the year (31 December 2023: no impairment charge).

The VIU is the present value of the future free cash flows expected to be derived from the investment, based upon a VIU calculation discounted at an appropriate rate for the investment. The cash flows are forecast based on the asset in its current condition, and do not take account of planned management actions, such as the limited Voluntary Severance Scheme announced in late 2024, which would result in a significantly higher recoverable amount were it to be included. See note 41 for further details on the Voluntary Severance Scheme.

The recoverable amount reflecting Management’s best estimate is sensitive to changes in the following key assumptions:

Cash flow forecasts

Cash flow forecasts are based on internal management information used for strategic planning for a period of up to five years, after which a long-term growth rate appropriate for the business is applied. The key cash flows in these forecasts are as follows:

Forecasted net lending growth, which is based on historical experience of the Group, strategic priorities and direction;
Forecasted SME business and increase in fee based income portfolio based on the targets for the coming years;
Increase in revenue reflective of balance sheet growth;
Operating profits based on historical experience and average margins;
Impairment charge based on historical experience and forecasted general macro-economic outlook;
Deposits projections based on the liquidity funding needs of the Groups; and
Issuance / redemptions of the debt issued and other capital raising activities.

The projected cash flows are stress tested with actual performance and verifiable economic data annually to reflect current market conditions and Management’s best estimates of future projections.

Growth rate

Growth rate is determined by reference to long-term economic growth and does not exceed the relevant long-term average growth rate of the industry in which it operates. A growth rate of 2.5% (31 December 2023: 2.5%) was used.

Discount rate

The discount rate used is a post-tax weighted average cost of capital of the Group of 11.5% (31 December 2023: 11.5%) as the cash flows used in impairment assessment are post-tax cash flows. The discount rate includes an additional risk premium to account for various specific risks. These specific risks are not reflected in the cash flows projected for impairment analysis.

The discount rate is used for various internal pricing models and is benchmarked with the industry averages to cater for the any changes in risk profile of the Group.

The Group uses post-tax discount rate as the cash flows generated by the subsidiary are post-tax cash flows.

2. Critical accounting estimates and judgements (continued)

Sensitivity analysis

The impact of changes in the growth rate, the discount rate and cash flows has been assessed by the Directors:

A decrease in ECB interest rate of 100bps would result in a VIU of €1,633m, resulting in an additional impairment charge of €450m;
An increase in ECB interest rate of 100bps would result in a VIU in excess of the carrying value after impairment charge, resulting in no additional impairment charge;
An increase in operating expenses of €20m per annum, would result in a VIU of €1,878m, resulting in an additional impairment charge of €205m;
A decrease in operating expenses of €20m per annum, would result in a VIU in excess of the carrying value after impairment charge, resulting in no additional impairment charge;
A decrease of 1% in long-term growth rate would result in a VIU of €1,898m, resulting in an additional impairment charge of €184m;
An increase of 1% in long-term growth rate would result in a VIU in excess of the carrying value after impairment charge, resulting in no additional impairment charge;
An increase of 1% in the discount rate would result in a VIU of €1,834m, resulting in an additional impairment charge of €249m; and
A decrease of 1% in the discount rate would result in a VIU in excess of the carrying value after impairment charge, resulting in no additional impairment charge.

3. Operating segments

The Group reports one operating segment which reflects the internal management reporting structure of the Group and how the Chief Operating Decision Maker (CODM) assesses performance and allocates resources. The ExCo as the CODM is responsible for implementing the strategic management of the Group as guided by the Board. The ExCo reviews key performance indicators and internal management reports on a monthly basis.

In line with IFRS 8, the Group also reports revenue from external customers for each major group of products and services. The amount of revenue reported is based on the financial information used to produce the Group’s financial statements.

The Group has assessed its operating segments and continues to be satisfied that there is only one operating segment based on reporting to the CODM, in accordance with IFRS 8.5. The requirements of IFRS 8 will continue to be assessed on an ongoing basis as the Group’s business develops.

3.1 Revenue from external customers split by products and services

The sources from which the Group earns external revenue are: interest income, fee and commission income, net trading income, and other operating income. Total revenue from external customers was €1,002m (31 December 2023: €870m). The main products from which the Group earns external revenue include: mortgages; consumer finance; treasury assets; and wholesale funding. The interest income from these products is set out in the table below. Interest income from external customers split by product:

	31 December 2024	31 December 2023
	€m	€m

Mortgages	673	611
Consumer finance*	74	50
Treasury assets	65	36
Wholesale funding**	87	81
Total	899	778

*Consumer finance comprises income from term loans, credit cards, overdrafts and asset financing.

**Wholesale funding comprises loans and advances to other banks.

3.2 Profit for the year based on geographical location

During the year ended 31 December 2024 the Group’s profit was solely incurred in Ireland. During the year ended 31 December 2023, the majority of the Group’s profit was incurred in Ireland. During 2023, an immaterial loss (less than €1m) was incurred outside of Ireland in the Group’s IOM subsidiary PBI Ltd, which entered liquidation on 20 December 2023.

3.3 Assets and liabilities based on geographical location

All assets and liabilities were held in Ireland at 31 December 2024 and 31 December 2023.

Notes to the Consolidated Financial Statements (continued)

4. Net interest income

	Year ended	Year ended
	31 December 2024	31 December 2023
	€m	€m

Interest income
Loans and advances to customers (excluding lease receivables)	718	649
Loans and advances to banks	87	81
Debt securities and other fixed-income securities	65	36
Interest income calculated using the effective interest rate method	870	766
Other interest income*	29	12
Interest income	899	778

Interest expense
Deposits from banks	(23)	(35)
Due to customers	(139)	(43)
Debt securities in issue	(114)	(71)
Loans and advances to banks	(1)	-
Subordinated liabilities	(9)	(8)
Lease liabilities	(1)	(1)
Interest expense	(287)	(158)
Net interest income	612	620

*Other interest income consists of interest income on lease receivables

Loans and advances to customers interest income includes a charge of €32m (31 December 2023: €29m) in respect of deferred acquisition costs and €22m (31 December 2023: €24m) amortisation on the business combination related fair value adjustments. Other interest income includes a charge of €2m (31 December 2023: €nil) in respect of deferred acquisition costs and €2m (31 December 2023: €1m) amortisation on the business combination related fair value adjustments.

Debt securities in issue includes €12m net interest expense on derivatives that are in hedge relationships (31 December 2023: €2m) and subordinated liabilities includes €1m net interest expense on derivatives that are in hedge relationships (31 December 2023: €nil).

5. Net fee and commission income

	Year ended	Year ended
	31 December 2024	31 December 2023
	€m	€m

Fee and commission income
Retail banking and credit card fees	86	76
Brokerage and insurance commission	11	9
Other fees and commission income	1	1
Fee and commission income	98	86

Fee and commission expense*	(43)	(44)
Net fee and commission income	55	42

* Fee and commission expenses primarily comprises retail banking and credit cards fees.

6. Net trading Income

	Year ended	Year ended
	31 December 2024	31 December 2023
	€m	€m

Held-for-trading
Foreign exchange gains	2	3
Net trading income	2	3

7. Administrative, staff and other expenses (excluding exceptional items)

	Year ended	Year ended
	31 December 2024	31 December 2023
	€m	€m

Staff costs (as detailed below)	233	201
Other general and administrative expenses	186	177
Administrative, staff and other expenses (excluding exceptional items)	419	378

Administrative, staff and other expenses (excluding exceptional items) includes costs of €3m in relation to legacy cases (31 December 2023: €2m)

Fees paid to the Group’s auditors for services outlined below

	Year ended	Year ended
	31 December 2024	31 December 2023
	€m	€m

Statutory auditor’s remuneration (including expenses and excluding VAT)
- Audit of the individual and the Group financial statements	2.0	1.8
- Other assurance services*	0.6	0.2
- Other non-audit services**	0.2	1.4

* Other assurance services in 2024 relate to interim financial statement review, CSRD Regulations and Country by Country Reporting. In 2023, other assurance services included ESG related costs and interim financial statement review related costs.

** Other non-audit services in 2024 include AI compliance and ID&V vendor assessment and March Euro Note Programme. In 2023, other non-audit services costs included fees and interim fees for professional services in relation to Project Sun, DTR Claim, and costs in relation to the Lombard KYC processes.

Staff costs

	Year ended	Year ended
	31 December 2024	31 December 2023
	€m	€m

Wages and salaries (including commission payable to sales staff)	205	183
Social insurance	22	20
Pension costs (payments to defined contribution pension schemes)	21	17
Total staff costs	248	220
Staff costs capitalised	(15)	(16)
Staff costs charged to exceptional items	-	(3)
Total staff costs included in the Income Statement	233	201

Staff costs of €15m (31 December 2023: €16m), have been capitalised to Intangible assets (see note 24), as the cost incurred was directly related to developing software and it is probable that future economic benefits that exceed its cost will flow from its use over more than one year. Therefore these costs are not included in this note.

Notes to the Consolidated Financial Statements (continued)

7. Administrative, staff and other expenses (excluding exceptional items) (continued)

Staff numbers

Closing and average number of staff (including Executive Directors) employed during the year are as follows:

	Closing staff numbers*		Average staff numbers
	2024	2023	2024	2023

Customer facing	1,198	1,116	1,194	1,024
Non-customer facing	2,161	2,214	2,155	2,031
Total number of staff	3,359	3,330	3,349	3,055

*Closing staff numbers are calculated on a full time equivalent (FTE) basis.

8. Bank levy and other regulatory charges

	Year ended	Year ended
	31 December 2024	31 December 2023
	€m	€m

Bank levy	23	22
Other regulatory charges	10	38
Bank levy and other regulatory charges	33	60

Other regulatory charges include €4m for the Central Bank Industry Funding Levy (31 December 2023: €4m), €nil for the Deposit Guarantee Scheme (31 December 2023: €28m), €nil related to Single Resolution Fund (31 December 2023: €4m) and €2m related to other regulatory charges (31 December 2023: €2m).

9. Exceptional items

	Year ended	Year ended
	31 December 2024	31 December 2023
	€m	€m

Costs incurred in relation to the Ulster Bank transaction (a)	-	(31)
Other (b)	(2)	(2)
Impairment write-back from deleveraging of loans (c)	2	5
Exceptional items	-	(28)

(a) During 2024, no costs were incurred in relation to the Ulster Bank transaction (31 December 2023: €31m) as migration completed in 2023.

(b) Other costs of €2m (31 December 2023: €2m) relate to additional costs arising in respect of a previous disposal of a business, offset by a provision release.

(c) The definition of exceptional items was refined to exclude profit or loss on material loan deleveraging post 31 December 2021 (including any increase in impairment arising solely as a result of the sale of loans) due to the sale of loans becoming part of the Group’s normal recovery strategy.

During 2024, warranty provisions and accruals of €2m (31 December 2023: €5m) were released in relation to loan deleveraging transactions that the Group executed pre-31 December 2021.

The Group considers these releases as exceptional as the warranty and indemnity provisions were previously recorded through exceptional impairment. This treatment is consistent with the treatment of losses on deleveraging of loans in prior years.

10. Taxation

(a) Analysis of taxation charge

	Year ended	Year ended
	31 December 2024	31 December 2023
	€m	€m

Current taxation
Charge for current year	1	1
	1	1
Deferred taxation
Origination and reversal of temporary differences	(4)	10
Deferred taxation recognised in the income statement (note 25)	(4)	10

Taxation (credited)/charged to income statement	(3)	11

Effective tax rate	(2%)	14%

The Group taxation for the year ended 31 December 2024 was €3m credit (31 December 2023: €11m charge). The current tax charge of €1m (31 December 2023: €1m) arises on trading income and certain non trading transactions, subject to the chargeable gains regime. Please refer to Note 25 ‘Deferred taxation’ for details of the components of deferred taxation.

(b) Reconciliation of standard to effective tax rate

	Year ended	Year ended
	31 December 2024	31 December 2023
	€m	€m

Profit on the Group activities before tax	159	79

Tax calculated at standard ROI corporation tax rate of 12.5% (2023: 12.5%)	20	10
Tax effect of non-deductible expenses and non-trading income	-	1
Previously unrecognised tax losses	(16)	-
Adjustments of tax for prior periods	(6)	-
Other	(1)	-
Taxation (credited)/charged to income statement	(3)	11

(c) Tax effects of each component of other comprehensive income

	Year ended 31 December 2024
	Gross	Tax	Net
	€m	€m	€m

Revaluation of property	(11)	4	(7)
Fair value reserve:
- Change in fair value of equity instruments	4	(1)	3
- Current tax on equity instrument disposal	-	-	-
- Deferred tax on equity instrument disposal	-	-	-
31 December 2024	(7)	3	(4)

Notes to the Consolidated Financial Statements (continued)

10. Taxation (continued)

	Year ended 31 December 2023
	Gross	Tax	Net
	€m	€m	€m

Revaluation of property	(12)	5	(7)
Fair value reserve:
- Change in fair value of equity instruments	5	(2)	3
- Current tax on equity instrument disposal	21	(6)	15
- Deferred tax on equity instrument disposal	(21)	6	(15)
31 December 2023	(7)	3	(4)

11. Earnings per ordinary share

(a) Basic earnings per ordinary share

	Year ended	Year ended
	31 December 2024	31 December 2023

Weighted average number of ordinary shares in issue and ranking for dividend excluding treasury shares	545,458,174	545,584,539

Profit for the year attributable to equity holders	€162m	€68m
Less AT1 coupon paid (see note 33)	(€43m)	(€43m)
Profit for the year attributable to equity holders less AT1 coupon paid	€119m	€25m

Basic earnings per ordinary share (€ cent)	21.7	4.5

(b) Diluted earnings per ordinary share

	Year ended	Year ended
	31 December 2024	31 December 2023

Weighted average number of ordinary shares excluding treasury shares held under employee benefit trust used in the calculation of diluted earnings per share	545,458,174	545,584,539
Diluted earnings per ordinary share (€ cent)	21.7	4.5

Diluted earnings per ordinary share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.

No adjustment to the weighted average number of ordinary shares for the effects of dilutive potential ordinary shares was required for the year ended 31 December 2024 or 31 December 2023, as the AT1 securities issued in 2022 and 2020 have no conversion features within the securities.

11. Earnings per ordinary share (continued)

Weighted average number of ordinary shares*

	2024	2023

Number of ordinary shares in issue at 1 January (note 33)	545,589,119	545,589,119

Treasury shares held (note 33)	(4,580)	(4,580)

Net movements during the year
Weighted average shares bought back**	(126,365)	-
Weighted average number of ordinary shares	545,458,174	545,584,539

* When calculating the earnings per share the weighted average number of ordinary shares outstanding during the year and all years presented shall be adjusted for events other than the conversion of potential ordinary shares that have changed the number of ordinary shares without a corresponding change in reserves.

** On the 14 October 2024 the Group completed a share buyback of 592,943 ordinary shares. See note 33 for further details.

There are no instruments with a potential to be converted to ordinary shares at 31 December 2024. The AT1 securities issued in 2022 and 2020 have no conversion features within the securities.

12. Cash and cash equivalents

For the purpose of the statement of cash flows, cash and cash equivalents comprise the following:

	31 December 2024	31 December 2023
	€m	€m

Cash at bank	72	71
Items in the course of collection	23	40
Loans and advances to banks repayable on demand (maturity of less than 3 months) (note 13)	2,202	2,051
Cash and cash equivalents as per statement of cash flows	2,297	2,162

At 31 December 2024, restricted cash of €181m (31 December 2023: €217m) (which is within loans and advances to banks repayable on demand) consists of cash of €180m (31 December 2023: €217m) held by the Group’s securitisation entities and €1m (31 December 2023: €nil) which relates to cash collateral placed with counterparties in relation to derivative positions and repurchase agreements.

The following contractual restrictions apply to our securitisation vehicles cash balances:

each vehicle must hold an amount equal to a percentage of the outstanding notes in a reserve account on demand as part of the credit enhancement and liquidity support rules;
these funds can only be used to fund any revenue shortfall for contractual payments and must be replenished as soon as additional funds are available; and
when the notes are fully repaid these reserve funds can be used to pay outstanding principal on the subordinated loan.

13. Loans and advances to banks

	31 December 2024	31 December 2023
	€m	€m

Held at amortised cost
Placed with central banks	1,887	1,688
Placed with other banks	315	363
Loans and advances to banks	2,202	2,051

Placements with other banks includes restricted cash of €181m (31 December 2023: €217m) of which €180m (31 December 2023: €217m) is held by the Group’s securitisation entities and €1m (31 December 2023: €nil) which relates to cash collateral placed with counterparties in relation to derivative positions and repurchase agreements. The fair value of collateral pledged by counterparties in relation to reverse repurchase agreements at 31 December 2024 is €341m (31 December 2023: €nil).

Loans and advances to banks amounting to €2,202m (31 December 2023: €2,051m) have a maturity of less than three months and therefore have been treated as cash and cash equivalents.

Notes to the Consolidated Financial Statements (continued)

14. Derivative financial instruments

Derivative instruments are used by the Group, for risk management purposes, to hedge against interest rate risk and foreign currency risk.

Certain derivative instruments, while being economic hedges, do not fulfil the hedge accounting criteria under IFRS 9 and are consequently classified as held for trading (HFT). All derivatives are carried at fair value.

The derivative instruments used by the Group include:

Currency forward rate contracts, which are commitments to purchase and sell currencies, including undelivered spot transactions; and
Interest rate swaps which involve the exchange of fixed and variable rate interest payments between two parties at specified times based on a common nominal amount and maturity date.

Further details on the Group’s risk management policies in connection with Derivatives and the policy surrounding Hedge Accounting are set out in section 3.3 of the Risk Management Report.

The notional amounts and fair values of derivative instruments held by the Group are set out in the table below:

	31 December 2024			31 December 2023
	Contract/ notional amount	Fair value asset	Fair value liability	Contract/ notional amount	Fair value asset	Fair value liability
	€m	€m	€m	€m	€m	€m

Derivatives held for hedging
Interest rate swaps	1,900	59		1,200	36	-
	1,900	59	-	1,200	36	-
Derivatives held for trading
Currency Forwards	51	-	-	57	-	1
	51	-	-	57	-	1
Derivative financial instruments as per the statement of financial position	1,951	59	-	1,257	36	1

Fair value hedges of interest rate risk

The Group uses fair value hedge accounting for hedge relationships to protect against changes in the fair value of financial assets and financial liabilities due to movements in interest rates. The Group uses interest rate swaps to hedge fair value interest rate risk. The financial instruments that are currently hedged for interest rate risk are fixed rate debt securities in issue and subordinated debt. All hedging instruments are included within derivative financial instruments on the balance sheet and hedge ineffectiveness is included within net trading income on the income statement (31 December 2024 €nil, 31 December 2023 €nil).

The Group held the following interest rate swaps as hedging instruments in fair value hedges of interest rate risk at 31 December 2024 and 31 December 2023.

Fair value hedges - Interest rate swaps*

31 December 2024	Less than 1 month	1 to 3 months	3 months to 1 year	1 to 5 years	5 years +

Liabilities:
Hedges of debt securities in issue
Nominal principal amount (€m)	-	-	-	1,650	-
Average interest rate (%)	-	-	-	2.85%	-

Hedges of subordinated debt
Nominal principal amount (€m)	-	-	-	250	-
Average interest rate (%)	-	-	-	3.48%	-

14. Derivative financial instruments (continued)

31 December 2023	Less than 1 month	1 to 3 months	3 months to 1 year	1 to 5 years	5 years +

Liabilities:
Hedges of debt securities in issue
Nominal principal amount (€m)	-	-	300	650	-
Average interest rate (%)	-	-	3.89%	3.17%	-

Hedges of subordinated debt
Nominal principal amount (€m)	-	-	-	250	-
Average interest rate (%)	-	-	-	3.48%	-

*The fixed rate on the interest rate swaps detailed above are swapped out for variable 3 month Euribor. The swaps pay 3 month EURIBOR on a quarterly basis and receive fixed on an annual basis.

The tables below set out the amounts relating to items designated as (a) hedging instruments and (b) hedged items in fair value hedges of interest rate risk together with the related hedge ineffectiveness at 31 December 2024 and December 2023.

(a) Hedging Instruments

31 December 2024	Nominal	Assets	Liabilities	Line item in SOFP where the hedging instrument is included	Change in fair value used for calculating hedge ineffectiveness for the year	Hedge ineffectiveness recognised in the income statement	Line item in the income statement that included hedge ineffectiveness
	€m	€m	€m		€m	€m

Interest rate swaps hedging:
Debt securities in issue	1,650	53	-	Derivative assets	19	-	Net trading income
Subordinated debt	250	6	-	Derivative assets	-	-	Net trading income

31 December 2023	Nominal	Assets	Liabilities	Line item in SOFP where the hedging instrument is included	Change in fair value used for calculating hedge ineffectiveness for the year	Hedge ineffectiveness recognised in the income statement	Line item in the income statement that included hedge ineffectiveness
	€m	€m	€m		€m	€m

Interest rate swaps hedging:
Debt securities in issue	950	30	-	Derivative assets	14	-	Net trading income
Subordinated debt	250	6	-	Derivative assets	5	-	Net trading income

Notes to the Consolidated Financial Statements (continued)

14. Derivative financial instruments (continued)

(b) Hedged Items

31 December 2024	Carrying amount of hedged items recognised in the SOFP		Accumulated amount of fair value hedge adjustments on the hedged items included in the carrying amount of the hedged item		Line item in the SOFP where hedged item is included	Change in fair value of hedged items used for calculating hedge ineffectiveness for the year	Accumulated amount of fair value hedge adjustments remaining in the SOFP for any hedged items that have ceased to be adjusted for hedging
	Assets	Liabilities	Assets	Liabilities
	€m	€m	€m	€m		€m	€m

Debt securities in issue	-	(1,731)	-	(33)	Debt securities in issue	(19)	-
Subordinated debt	-	(257)	-	(5)	Subordinated liabilities	-	-

31 December 2023	Carrying amount of hedged items recognised in the SOFP		Accumulated amount of fair value hedge adjustments on the hedged items included in the carrying amount of the hedged item		Line item in the SOFP where hedged item is included	Change in fair value of hedged items used for calculating hedge ineffectiveness for the year	Accumulated amount of fair value hedge adjustments remaining in the SOFP for any hedged items that have ceased to be adjusted for hedging
	Assets	Liabilities	Assets	Liabilities
	€m	€m	€m	€m		€m	€m

Debt securities in issue	-	(997)	-	(14)	Debt securities in issue	(14)	-
Subordinated debt	-	(257)	-	(5)	Subordinated liabilities	(5)	-

15. Other assets

	31 December 2024	31 December 2023
	€m	€m

Receivables	-	57
Other	7	3
	7	60

Other assets include €6m relating to our Interest First deposit product at 31 December 2024 (31 December 2023: €nil).

Receivables of €57m at 31 December 2023 relates to amounts due to the Group on completion of the liquidation of PBI Ltd which entered liquidation on 15 December 2023. This was received during 2024.

16. Assets classified as held for sale

At 31 December 2024, assets classified as held for sale of €12m (31 December 2023: €12m) consists of:

€7m (31 December 2023: €11m) which relates to collateral in possession, these properties are expected to be sold within the next 12 months; and
€5m (31 December 2023: €1m) which relates to three branch properties (31 December 2023: two branch properties) that are no longer occupied by the Group, the sales of these properties are expected to complete within the next 12 months.

17. Debt securities

	31 December 2024	31 December 2023
	Total HTC	Total HTC
	€m	€m

Government bonds	4,259	3,256
Covered bonds	68	-
Gross debt securities	4,327	3,256

As at 31 December 2024, all unpledged debt securities are available to be used and are eligible as collateral (though eligibility will depend on the criteria of the counterparty) in sale and repurchase agreements.

Debt securities that are managed on a Hold to Collect (HTC) business model basis are accounted for at amortised cost.

Government bonds of €4.3bn (31 December 2023: €3.3bn) comprise of Irish, Spanish, Portuguese, French, Italian, Belgian, Austrian and EU government bonds which are classified as HTC.

Covered bonds of €0.1bn (31 December 2023: €nil) comprise of French corporate bonds which are classified as HTC.

The HTC securities represent a portfolio of securities structured for the purpose of collecting contractual cashflows to maturity. The Group has no HTC&S debt securities as at 31 December 2024 and 31 December 2023.

At 31 December 2024, debt securities at amortised cost with a fair value of €371m (31 December 2023: €529m) had been pledged to third parties in sale and repurchase agreements. The Group has not derecognised any securities delivered in such sale and repurchase agreements on the statement of financial position.

All debt securities at 31 December 2024 are stage 1 for ECL purposes.

(a) HTC

The movement in HTC securities is classified as follows:

	31 December 2024	31 December 2023
	HTC	HTC
	€m	€m

As at 1 January	3,256	3,177
Additions	1,212	828
Maturities	(170)	(728)
Interest net of cash receipts	7	(14)
Amortisation of premium/(discount)	22	(7)
Total	4,327	3,256

(b) Amounts arising from impairment provisioning on debt securities:

Held at amortised cost

As at 31 December 2024, the amount arising from ECL on debt securities measured at amortised cost is €0.6m (31 December 2023: €0.6m). The ECL on debt instruments measured at amortised cost is offset against the carrying amount of the assets in the statement of financial position.

Notes to the Consolidated Financial Statements (continued)

18. Equity securities

	31 December 2024	31 December 2023
	€m	€m

As at 1 January	5	30
Revaluation	4	5
Disposal	-	(30)
Total equity securities	9	5

The carrying value of equity securities can be analysed as follows:

	31 December 2024	31 December 2023
	€m	€m

Unlisted	9	5
Gross equity securities	9	5

The Group holds Series A and Series B preferred stock in Visa Inc. at 31 December 2024 with a value of €9m (31 December 2023: €5m). The Series A preferred stock was issued from Visa Inc during 2024 upon the conversion of Series B preferred stock. These were fair valued at Series A €7m and Series B €2m at 31 December 2024 (31 December 2023: €nil and €5m) and are recognised in the Statement of Financial Position at FVOCI.

During 2023 the Group disposed of its previous holding of Visa A shares for €30m. These Series A preferred stock were initially issued upon the conversion of Series B preferred stock by Visa Inc in 2020.

The fair value of the preferred stock Series A is classified as Level 1 and the fair value of the preferred stock Series B is classified as Level 3, as the valuation of these preferred stock includes inputs that are based on unobservable data (refer to note 35 for details).

19. Prepayments and contract assets

	31 December 2024	31 December 2023
	€m	€m

Visa prepayments	30	43
Other prepayments	33	37
	63	80

20. Loans and advances to customers

Loans and advances by category are set out below:

	31 December 2024	31 December 2023
	€m	€m

Residential mortgages
- Held through special purpose entities	5,342	5,664
- Held directly	14,661	14,642
Total residential mortgages	20,003	20,306
Commercial mortgage loans	493	437
Consumer finance	553	499
Finance leases and hire purchase receivables	466	446
Gross loans and advances to customers	21,515	21,688
Less: provision for impairment (note 21)	(392)	(570)
Deferred fees, discounts and business combination related fair value adjustments	300	309
Net loans and advances to customers	21,423	21,427

Loans and advances can be analysed into tracker, fixed and variable rate loans as follows:

	Gross loans and advances to customers		Net loans and advances to customers
	31 December 2024	31 December 2023	31 December 2024	31 December 2023
	€m	€m	€m	€m

Tracker rate	2,692	3,453	2,563	3,186
Variable rate	4,669	3,788	4,525	3,632
Fixed rate	14,154	14,447	14,035	14,300
Gross loans and advances to customers	21,515	21,688	21,123	21,118
Deferred fees, discounts and business combination related fair value adjustments	300	309	300	309
Gross loans and advances to customers and deferred fees	21,815	21,997	21,423	21,427

The Group has established a number of securitisation entities. This involved transferring the Group’s interest in pools of residential mortgages to a number of special purpose entities which issued mortgage-backed floating-rate notes to fund the purchase of the interest in the mortgage pools. The notes are secured by a first fixed charge over the residential mortgages in each pool and may be sold to investors or held by the Group and used as collateral for borrowings.

Details of the residential mortgage pools sold to special purpose entities and the notes issued by the special purpose entities are included below:

	31 December 2024	31 December 2023
	€m	€m

Residential mortgages held through special purpose entities	5,342	5,664
Notes issued by special purpose entities
- rated	5,164	4,911
- unrated	262	806

Notes to the Consolidated Financial Statements (continued)

20. Loans and advances to customers (continued)

The notes issued by these special purpose entities comprise the following:

	31 December 2024	31 December 2023
	€m	€

Held by other banks and institutions as part of collateralised lending or sale and repurchase agreements (note 26)	-	287
Rated notes, available for collateral *	4,265	3,725
Rated notes, unavailable for collateral	899	899
Unrated notes	262	806
	5,426	5,717

*The eligibility of available collateral will depend on the criteria of the counterparty.

Loans and advances balance movement for the year ended 31 December 2024 and the year ended 31 December 2023 is set out in the following tables:

	Non-credit impaired		Credit impaired		Total
	Stage 1	Stage 2	Stage 3	POCI
	€m	€m	€m	€m	€m

Balance as at 1 January 2024	19,057	1,913	718	-	21,688

New assets originated*	2,228	212	2	-	2,442
Loans acquired	-	-	-	-	-

Stage Transfers:
Transfers from Stage 1 to Stage 2	(711)	711	-	-	-
Transfers to Stage 3	(36)	(96)	132	-	-
Transfers from Stage 2 to Stage 1	465	(465)	-	-	-
Transfers from Stage 3	4	57	(61)	-	-
Net movement arising from transfer of Stage	(278)	207	71	-	-

Redemptions and repayments	(1,906)	(297)	(49)	-	(2,252)
Decrease due to write offs	(1)	(2)	(19)	-	(22)
Disposals	-	-	(341)	-	(341)
Other movements	-	-	-	-	-
Balance as at 31 December 2024	19,100	2,033	382	-	21,515

*Loan originations are net of repayments in the year

20. Loans and advances to customers (continued)

	Non-credit impaired		Credit impaired		Total
	Stage 1	Stage 2	Stage 3	POCI
	€m	€m	€m	€m	€m

Balance as at 1 January 2023	17,455	1,699	649	1	19,804

New assets originated*	2,205	122	10	-	2,337
Loans acquired**	1,308	127	55	-	1,490
Stage Transfers:
Transfers from Stage 1 to Stage 2	(432)	432	-	-	-
Transfers to Stage 3	(43)	(136)	179	-	-
Transfers from Stage 2 to Stage 1	195	(195)	-	-	-
Transfers from Stage 3	-	95	(95)	-	-
Net movement arising from transfer of Stage	(280)	196	84	-	-

Redemptions and repayments	(1,631)	(230)	(62)	-	(1,923)
Decrease due to write offs	-	(1)	(18)	-	(19)
Disposals	-	-	-	-	-
Other movements	-	-	-	(1)	(1)
Balance as at 31 December 2023	19,057	1,913	718	-	21,688

*Loan originations are net of repayments in the year

**Net of repayments

Amounts receivable under finance leases and hire purchase receivables

The following balances principally comprise of leasing arrangements and hire purchase agreements of vehicles, plant, machinery and equipment:

	31 December 2024	31 December 2023
	€m	€m

Gross receivables
Not later than 1 year	184	172
Later than 1 year and not later than 2 years	146	138
Later than 2 years and not later than 3 years	99	97
Later than 3 years and not later than 4 years	60	59
Later than 4 years and not later than 5 years	26	26
Later than 5 years	7	8
Total	522	500
Unearned future finance income	(56)	(54)
Deferred costs incurred on origination	6	5
Present value of minimum payments	472	451
ECL allowance for uncollectible minimum payments receivable	(19)	(20)

Notes to the Consolidated Financial Statements (continued)

21. Impairment provisions

Loans and advances to customers

The following tables reflects non-performing loans for which ECL provisions are held and an analysis of Stage 1, Stage 2 and Stage 3 ECL provisions across the loans and advances to customers portfolio.

The non-performing loan balance as at 31 December 2024 was €382m (31 December 2023: €718m). Refer to note 36 for further details.

				ECL provisions
31 December 2024	Loans and advances to customers	of which NPLs	NPL % of total loans	Stage 1	Stage 2	Stage 3	Total	Total ECL provisions as % of total loans
	€m	€m	%	€m	€m	€m	€m	%

Residential:
- Home loans	19,539	259	1.3%	98	38	73	209	1.1%
- Buy-to-let	464	71	15.3%	2	43	31	76	16.4%
Commercial	493	24	4.9%	5	36	9	50	10.1%
Consumer finance	553	20	3.6%	8	14	16	38	6.9%
Finance leases and hire purchase receivables	466	8	1.7%	10	3	6	19	4.1%
Total gross loans	21,515	382	1.8%	123	134	135	392	1.8%
Impairment provision	(392)
Deferred fees, discounts and business combination related fair value adjustments	300
Balance as at 31 December 2024	21,423

				ECL provisions
31 December 2023	Loans and advances to customers	of which NPLs	NPL % of total loans	Stage 1	Stage 2	Stage 3	Total	Total ECL provisions as % of total loans
	€m	€m	%	€m	€m	€m	€m	%

Residential:
- Home loans	19,557	403	2.1%	131	51	110	292	1.5%
- Buy-to-let	749	267	35.6%	2	58	99	159	21.2%
Commercial	437	20	4.6%	8	47	11	66	15.1%
Consumer finance	499	16	3.2%	12	8	13	33	6.6%
Finance leases and hire purchase receivables	446	12	2.7%	12	-	8	20	4.5%
Total gross loans	21,688	718	3.3%	165	164	241	570	2.6%
Impairment provision	(570)
Deferred fees, discounts and business combination related fair value adjustments	309
Balance as at 31 December 2023	21,427

21. Impairment provisions (continued)

A reconciliation of the provision for impairment losses for loans and advances to customers is as follows:

2024	Residential mortgages	Commercial	Consumer finance	Finance leases and hire purchase receivables	Total
	€m	€m	€m	€m	€m

Total by portfolio
ECL as at 1 January 2024	451	66	33	20	570

Redemptions and repayments	(28)	-	-	-	(28)
Net remeasurement of loss allowance	(35)	(20)	3	(8)	(60)
Loan originations	28	14	5	8	55
Loans acquired	-	-	-	-	-
Net movement excluding derecognition	(35)	(6)	8	-	(33)

Derecognition-disposals	(124)	(9)	-	-	(133)
Derecognition-repossessions	-	-	-	-	-
Derecognition-write offs*	(7)	(1)	(3)	(1)	(12)
Derecognition	(131)	(10)	(3)	(1)	(145)

ECL as at 31 December 2024**	285	50	38	19	392

Net movement excluding derecognition (from above)					(33)
Interest income booked but not recognised					(11)
Other movements***					13
Write offs net of recoveries					1
Impairment write-back on loans and advances to customers for the year ended 31 December 2024					(30)

*The Group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write-off may be earlier than collateral realisation.

**Closing ECL incorporates ECL of €12m on loan commitments.

***Includes impairment charge on deleveraging (€9m) and provisions on loan commitments where there is no recognised financial asset (€4m).

Notes to the Consolidated Financial Statements (continued)

21. Impairment provisions (continued)

2023	Residential mortgages	Commercial	Consumer finance	Finance leases and hire purchase receivables	Total
	€m	€m	€m	€m	€m

Total by portfolio
ECL as at 1 January 2023	447	40	34	-	521

Redemptions and repayments	(22)	(1)	-	-	(23)
Net remeasurement of loss allowance	(8)	2	(5)	-	(11)
Loan originations	29	16	3	-	48
Loans acquired	12	10	4	20	46
Net movement excluding derecognition	11	27	2	20	60

Derecognition-disposals	-	-	-	-	-
Derecognition-repossessions	-	-	-	-	-
Derecognition-write offs*	(7)	(1)	(3)	-	(11)
Derecognition	(7)	(1)	(3)	-	(11)

ECL as at 31 December 2023**	451	66	33	20	570

Net movement excluding derecognition (from above)					60
Interest income booked but not recognised					(12)
Other movements***					6
Write offs net of recoveries					2
Impairment charge on loans and advances to customers for the year ended 31 December 2023					56

**Closing ECL incorporates ECL of €8m on loan commitments.

***Includes costs in respect of deleveraging (€2m) and impairment of interest in associated undertakings (€4m).

21. Impairment provisions (continued)

	Stage 1	Stage 2	Stage 3	Total
2024	€m	€m	€m	€m

Total by stage
ECL as at 1 January 2024	165	164	241	570

Transfer to Stage 1	23	(22)	(1)	-
Transfer to Stage 2	(13)	22	(9)	-
Transfer to Stage 3	(1)	(10)	11	-
Stage transfers	9	(10)	1	-

Redemptions and repayments	(6)	(15)	(7)	(28)
Net remeasurement of loss allowance	(79)	(24)	43	(60)
Loan originations	34	20	1	55
Loans Acquired	-	-	-	-
Net movement excluding derecognition	(51)	(19)	37	(33)

Derecognition-disposals	-	-	(133)	(133)
Derecognition-repossessions	-	-	-	-
Derecognition-write offs*	-	(1)	(11)	(12)
Derecognition	-	(1)	(144)	(145)

ECL as at 31 December 2024**	123	134	135	392

Net movement excluding derecognition (from above)				(33)
Interest income booked but not recognised				(11)
Other movements***				13
Write offs net of recoveries				1
Impairment write-back on loans and advances to customers for the year ended 31 December 2024				(30)

*The group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write off may be earlier than collateral realisation.

**Closing ECL incorporates ECL of €12m on loan commitments.

***Includes impairment charge on deleveraging (€9m) and provisions on loan commitments where there is no recognised financial asset (€4m).

Notes to the Consolidated Financial Statements (continued)

21. Impairment provisions (continued)

	Stage 1	Stage 2	Stage 3	Total
2023	€m	€m	€m	€m

Total by stage
ECL as at 1 January 2023	136	163	222	521

Transfer to Stage 1	31	(30)	(1)	-
Transfer to Stage 2	(6)	21	(15)	-
Transfer to Stage 3	-	(21)	21	-
Stage transfers	25	(30)	5	-

Redemptions and repayments	(5)	(11)	(7)	(23)
Net remeasurement of loss allowance	(38)	12	15	(11)
Loan originations	18	27	3	48
Loans Acquired	29	3	14	46
Net movement excluding derecognition	4	31	25	60

Derecognition-disposals	-	-	-	-
Derecognition-repossessions	-	-	-	-
Derecognition-write offs*	-	-	(11)	(11)
Derecognition	-	-	(11)	(11)

ECL as at 31 December 2023**	165	164	241	570

Net movement excluding derecognition (from above)				60
Interest income booked but not recognised				(12)
Other movements***				6
Write offs net of recoveries				2
Impairment charge on loans and advances to customers for the year ended 31 December 2023				56

*The group writes off an impaired financial asset (and the related impairment allowance), either partially or in full, when there is no realistic prospect of recovery or on foot of a negotiated settlement. In circumstances where the net realisable value of any collateral has been determined and there is no reasonable expectation of further recovery, write off may be earlier than collateral realisation.

**Closing ECL incorporates ECL of €8m on loan commitments.

***Includes costs in respect of deleveraging (€2m) and impairment of interest in associated undertakings (€4m).

Modified Financial Assets

There have been no significant modified financial assets for which the loss allowance has changed from lifetime to 12-month ECL at 31 December 2024 and 31 December 2023.

22. Interest in associated undertakings

	31 December	31 December
	2024	2023
	€m	€m

Clearpay	1	1
First Home Scheme Ireland	20	15
	21	16

The Group owns a non-controlling interest in Clearpay DAC (33%) as at 31 December 2024. This investment is accounted for under the equity method in the consolidated financial statements and has a carrying value of €1m at 31 December 2024 (31 December 2023: €1m). This investment will be increased or decreased by the Group’s share of the profit or loss which will be assessed annually.

On 15 November 2023 Synch Payments DAC announced that it would cease operations and an impairment of €3.5m was recognised in 2023. In 2024, the Group ceased recognising its investment in Synch Payments DAC as it was liquidated on 26 February 2024.

On 1 July 2022, the Group invested in First Home Scheme Ireland DAC along with the Irish Government, AIB and Bank of Ireland. First Home Scheme Ireland DAC is incorporated and operates in the Republic of Ireland providing equity support to future homeowners by taking a beneficial interest in residential dwellings which enables customers to purchase these residential dwellings. The participants fund these purchases, as well as costs, through a loan facility. The Group owns a non-controlling interest of 25% as 31 December 2024. This investment in associate is accounted for under the equity method in the consolidated financial statements and was initially recognised at €11m being the Group's agreed 13.5% contribution rate.

The Group has presented summarised financial information of the First Home Scheme Ireland DAC in line with IFRS 12 below as well as a reconciliation of the summarised financial information to the carrying value above.

	31 December	31 December
	2024	2023
	€m	€m

Summarised Statement of financial position
Current assets	41	58
Cash and cash equivalents	41	58
Non-current assets	226	89
Current liabilities	(1)	(1)
Non-current liabilities	(266)	(146)
Non-current financial liabilities	(266)	(146)

Summarised Income statement
Other operating income	13	9
Operating expenses	(7)	(6)
Finance expense	(6)	(3)

Reconciliation of summarised financial information to carrying value
1 January	15	10
Share of loan facility*	2	-
Drawdowns of loan facility**	3	5
31 December	20	15

*The Group’s share of the loan facility is based on the finance expense amount disclosed above and the share of the remaining profit from the Revenue less Operating expenses above.

**The total drawdowns on the loan facility are disclosed in the notes to the First Home Scheme Ireland DAC financial statements. The amount above is the Group’s contributions.

In presenting details of the associates of the Group, the exemption permitted by Section 316 of the Companies Act 2014 has been availed of and the Group will annex a full listing of associates to its annual return to the Companies Registration Office.

Notes to the Consolidated Financial Statements (continued)

23. Property and equipment

				Right-of-use assets*
	Held at fair value land and buildings	Fixtures and fittings	Held at cost office and computer equipment	Leased buildings	Leased motor vehicles	Total
2024	€m	€m	€m	€m	€m	€m

Cost or valuation
At 1 January	86	147	118	65	3	419
Additions	-	12	2	5	2	21
Revaluations	(11)	-	-	-	-	(11)
Depreciation write-back on revaluation	(1)	-	-	-	-	(1)
Disposals or cancellations	(3)	-	-	-	-	(3)
At 31 December	71	159	120	70	5	425

Accumulated depreciation
At 1 January	-	(93)	(87)	(31)	(3)	(214)
Provided in the year	(1)	(10)	(11)	(6)	(1)	(29)
Eliminate on revaluation	1	-	-	-	-	1
At 31 December	-	(103)	(98)	(37)	(4)	(242)

Net book value at 31 December	71	56	22	33	1	183

*For further details on right-of-use assets refer to note 32.

Of the €11m net revaluation loss, €11m is included in the revaluation reserve in the statement of comprehensive income and no impairment write-back is recognised on land and buildings in the income statement.

				Right-of-use assets*
	Held at fair value land and buildings	Fixtures and fittings	Held at cost office and computer equipment	Leased buildings	Leased motor vehicles	Total
2023	€m	€m	€m	€m	€m	€m

Cost or valuation
At 1 January	91	128	109	61	3	392
Additions	-	19	9	1	-	29
Additions from Business Combinations	9	-	-	3	-	12
Revaluations	(12)	-	-	-	-	(12)
Depreciation write-back on revaluation	(1)	-	-	-	-	(1)
Disposals or cancellations	(1)	-	-	-	-	(1)
At 31 December	86	147	118	65	3	419

Accumulated depreciation
At 1 January	-	(84)	(77)	(25)	(2)	(188)
Provided in the year	(1)	(9)	(10)	(6)	(1)	(27)
Eliminate on revaluation	1	-	-	-	-	1
At 31 December	-	(93)	(87)	(31)	(3)	(214)

Net book value at 31 December	86	54	31	34	-	205

*For further details on right-of-use assets refer to note 32.

23. Property and equipment (continued)

Of the €12m revaluation loss, €12m is included in the revaluation reserve in the statement of comprehensive income and no impairment write-back is recognised on land and buildings in the income statement.

The net book value of land and buildings includes the following:

	31 December	31 December
	2024	2023
	€m	€m

Land	24	26
Buildings - freehold fair value	47	60
Buildings - fixtures and fittings	45	42
Buildings - leasehold	44	46
	160	174

Buildings – leasehold includes €11m (31 December 2023: €12m) of fixtures and fittings within leased buildings.

Land and buildings as at 31 December 2024 held at fair value was €71m (31 December 2023: €86m). The historic cost of land and buildings under the cost model is €43m (31 December 2023: €44m).

Fair value measurement of Group’s land and buildings

The Group’s freehold land and buildings are stated at their revalued amounts, being the fair value at the date of revaluation less any accumulated depreciation recognised from the date of the latest revaluation. On the date of revaluation any accumulated depreciation is eliminated. The fair value measurements of the Group’s freehold land and buildings as at 31 December 2024 and 31 December 2023 were performed by independent professional valuers having appropriate qualifications and recent experience in the fair value measurement of properties in the locations and categories being valued. The effective date of revaluation is 31 October 2024 and 30 November 2023.

The fair value of the freehold land and buildings was determined based on a market comparable approach that reflects recent transaction prices for similar properties using capitalisation yields ranging from 6.64% to 10.50%. There has been no change to the valuation techniques during the year.

Details of the freehold land and buildings and information about the fair value hierarchy as defined in the Group’s accounting policy as at 31 December 2024 and 31 December 2023 are as follows:

31 December 2024	Level 1	Level 2	Level 3	Total fair value
	€m	€m	€m	€m

Land	-	-	24	24
Buildings - freehold	-	-	47	47
	-	-	71	71

31 December 2023	Level 1	Level 2	Level 3	Total fair value
	€m	€m	€m	€m

Land	-	-	26	26
Buildings - freehold	-	-	60	60
	-	-	86	86

Notes to the Consolidated Financial Statements (continued)

23. Property and equipment (continued)

Key unobservable inputs

The following table summarises the valuation techniques and inputs used in the determination of freehold land and building values:

31 December 2024	Cap Yield			Rent per sqm
	%			€
	Low	High	weighted average	Low	High	weighted average

Freehold Land and Buildings
Urban Centres	6.64%	8.50%	6.87%	237	1,700	626
Urban Other	7.50%	9.75%	8.15%	210	770	351
Rural	8.00%	10.50%	8.99%	108	269	202

31 December 2023	Cap Yield			Rent per sqm
	%			€
	Low	High	weighted average	Low	High	weighted average

Freehold Land and Buildings
Urban Centres	5.35%	9.65%	9.03%	237	4,252	657
Urban Other	7.50%	9.50%	8.23%	194	770	348
Rural	8.00%	10.75%	9.07%	108	266	196

Interrelationship between key unobservable inputs and fair value measurement

The estimated fair value would increase/(decrease) if:

capital yield were higher (lower)
the rent per square metre were higher (lower)

24. Intangible assets

Software	31 December 2024	31 December 2023
	€m	€m

Cost
At 1 January	360	293
Additions	88	67
At 31 December	448	360

Accumulated amortisation
At 1 January	(173)	(133)
Provided in the year	(62)	(40)
At 31 December	(235)	(173)

Net book value at 31 December	213	187

Research and development expenditure in the period to 31 December 2024 was €27m (31 December 2023: €28m) and is included in Note 7: Administrative, staff and other expenses (excluding exceptional items).

25. Deferred taxation

	31 December 2024	31 December 2023
	€m	€m

Deferred tax liabilities	(15)	(18)
Deferred tax assets	331	327
Net deferred tax assets	316	309

Net deferred tax assets are attributable to the following:

2024	At 1 January	Recognised in income statement	Recognised in other comprehensive income	At 31 December
	€m	€m	€m	€m

Property and equipment (including right of use assets)	(17)	-	4	(13)
Unrealised gains/(losses) on assets/liabilities	(1)	-	(1)	(2)
Losses carried forward, movements comprised of	323	-	-	323
- Losses generated/(utilised) in the period	-	(16)	-	(16)
- Losses previously unrecognised tax losses	-	16	-	16
Other temporary differences	-	4	-	4
Other Liabilities (including lease liabilities)	4	-	-	4
	309	4	3	316

2023	At 1 January	Recognised in income statement	Recognised in other comprehensive income	At 31 December
	€m	€m	€m	€m

Property and equipment (including right of use assets)	(18)	(4)	5	(17)
Unrealised gains/(losses) on assets/liabilities	(7)	-	6	(1)
Losses carried forward	334	(11)	-	323
Other temporary differences	-	1	(1)	-
Other Liabilities (including lease liabilities)	-	4	-	4
	309	(10)	10	309

Notes to the Consolidated Financial Statements (continued)

25. Deferred taxation (continued)

The Group applied Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12) from 1 January 2023. Following the amendments, the Group has recognised a separate deferred tax asset in relation to its lease liabilities and a deferred tax liability in relation to its right-of-use assets.

In line with the requirements of IAS 12 “Deferred Tax Assets”, Management and Directors formed the view that there should be sufficient future taxable profits within the PTSB legal entity against which PTSB tax losses carried forward can be used. Management and Directors have reviewed this position as at 31 December 2024 and remain of the view that it is appropriate to continue to recognise a deferred tax asset on the full quantum of tax losses carried forward in PTSB. This information is based on the following supporting evidence: (i) A review of the quantum of tax losses carried forward in PTSB in conjunction with forecasted profitability (the projections used having been approved by the Board of Directors). This review demonstrated that it is probable that there will be sufficient future taxable profits within PTSB against which the full quantum of tax losses carried forward can be utilised; (ii) The consideration of forecasting risks, including sensitivity analysis on the financial projections used (including an analysis of the effects of higher than expected impairment levels and lower than expected net interest margin). This analysis demonstrated, were certain adverse events to occur, it would remain probable that there would be sufficient future taxable profits within PTSB against which the full quantum of tax losses carried forward could be utilised, albeit that the period of time over which such utilisation would occur would be extended; and (iii) The consideration of a number of other factors which may impact the utilisation of the tax losses including the macroeconomic environment, progress made on the Group’s NPL strategy and the Group’s financial position. These factors are set out in further details in note 2, Critical accounting estimates and judgements.

It should also be noted that under current Irish tax legislation there is no time restriction on the utilisation of trading losses. Therefore, the tax losses carried forward in PTSB are available for utilisation against profits of the same trade in any future period. Also, the Directors are satisfied that taxable future profits should be available to recover the remaining deferred tax assets.

The total unrecognised deferred tax assets on carried forward tax losses at 31 December 2024 amounted to €20m (31 December 2023: €36m).

Included in the overall deferred tax asset is a deferred tax asset of €nil in relation to Permanent TSB Group Holdings plc (31 December 2023: €nil).

In accordance with IFRS these balances are recognised on an undiscounted basis.

Pillar Two – minimum effective tax rate

In 2021 the Organisation for Economic Co-operation and Development (OECD) released the 15% minimum effective tax rate (“Pillar Two”) Model Rules. Pillar Two legislation has been enacted in Ireland, effective 1 January 2024. The Group has performed an assessment of the Group’s potential exposure to Pillar Two income taxes. Based on the assessment performed, the Group will be in scope of the Pillar Two legislation for the Group’s financial year beginning 1 January 2025. The Group will continue to assess the application of Pillar Two legislation for future reporting periods. The Group has applied the IAS 12 temporary exception to the accounting for deferred taxes arising from the implementation of the Pillar Two rules.

26. Deposits by banks

	31 December 2024	31 December 2023
	€m	€m

Placed by other banks and institutions on repurchase agreements	65	380
Other deposits	40	18
Deposits by banks	105	398

Securities which are sold under agreements to repurchase are secured by Irish and other eligible bonds. These agreements are completed under market standard Global Master Repurchase Agreements. The fair value of the financial assets pledged under existing agreement to repurchase is €371m at 31 December 2024 (31 December 2023: €529m). Other deposits include €40m (31 December 2023: €18m) of cash collateral placed with PTSB in relation to derivative positions and repurchase agreements.

27. Customer accounts

	31 December 2024	31 December 2023
	€m	€m

Term deposits	5,104	3,028
Demand deposits	7,520	8,451
Current accounts	9,187	9,329
Notice and other accounts	2,309	2,158
Customer accounts	24,120	22,966

All customer accounts above are held at amortised cost.

At 31 December 2024, the Group held corporate deposits of €1,468m (31 December 2023: €1,316m).

An analysis of the contractual maturity profile of customer accounts is set out in the liquidity risk section of note 36 of the consolidated financial statements.

28. Debt securities in issue

	31 December 2024	31 December 2023
	€m	€m

At amortised cost
Bonds and medium-term notes	1,731	1,512
	1,731	1,512

Maturity analysis
Repayable in less than 1 year	56	54
Repayable in greater than 1 year but less than 5 years	1,168	960
Repayable in greater than 5 years	507	498
	1,731	1,512

Bonds and medium-term notes

In the first half of 2024, PTSBGH issued €500m of Senior Unsecured Medium Term Notes at a fixed rate of 4.25% per annum, maturing on 10 July 2030. Interest is payable on the nominal amount annually in arrears on the coupon date.

Senior Unsecured Medium Term notes of €300m at a fixed rate of 5.25% were redeemed on the optional redemption date of 01 July 2024.

€1,650m of Senior Unsecured Medium Term Notes are currently hedged for fair value interest rate risk. At 31 December 2024, debt securities in issue contains €33m hedge adjustment (31 December 2023: €14m). Further details are included in note 14 of the financial statements.

Notes to the Consolidated Financial Statements (continued)

29. Other liabilities

	31 December 2024	31 December 2023
	€m	€m

Amounts falling due within one year
PAYE and social insurance	6	6
Other taxation including deposit interest retention tax (DIRT)	12	4
Creditor accruals	67	95
Other*	9	8
Lease liability (see note 32 for further information on lease liabilities)	6	6
Total amounts falling due within one year	100	119

Amounts falling due greater than one year
Lease liability (see note 32 for further information on lease liabilities)	29	29
Total amounts falling due greater than one year	29	29

Total other liabilities	129	148

* Other includes liability of €8m for Visa balances at 31 December 2024 (31 December 2023: €8m).

30. Provisions

	2024				2023
	Restructuring costs	Provision for legacy, legal and compliance liabilities	Other	Total	Restructuring costs	Provision for legacy, legal and compliance liabilities	Other	Total
	€m	€m	€m	€m	€m	€m	€m	€m

As at 1 January	2	13	25	40	4	23	53	80
Provisions made during the year	-	13	5	18	-	2	6	8
Write-back of provisions during the year	-	(3)	(2)	(5)	-	(1)	(6)	(7)
Provisions used during the year	(1)	(6)	-	(7)	(2)	(11)	(28)	(41)
As at 31 December	1	17	28	46	2	13	25	40

The provision at 31 December 2024 is €46m (31 December 2023: €40m) which is comprised of the following:

Restructuring costs

During 2020, the Group announced an Enterprise Transformation program. At 31 December 2020, a provision for restructuring of €27m was recognised based on the estimate of the costs of this program. From 2021, additional provisions of €10m were made and amounts of €36m were utilised. The remaining provision of €0.4m is included in the Restructuring provision. This program is expected to conclude in 2025.

The Group remains a lessee on a number of non-cancellable leases over properties that it no longer occupies following a restructure in 2013. A provision of €0.6m relates to dilapidation costs associated with these properties.

30. Provisions (continued)

Provision for legacy, legal and compliance liabilities

As at 31 December 2024, the Group has provisions of €17m relating to legal, compliance and other costs of ongoing disputes in relation to legacy business issues (31 December 2023: €13m).

A provision of €13m was made during 2024 relating to legal, compliance and other costs of ongoing disputes in relation to legacy business issues. €4m of this relates to ECL (31 December 2023: €nil) held against loan commitments (see note 41 for further detail) (where the loan commitment relates to a loan already recognised as a financial asset, the ECL is recognised in Loans and advances to customers).

Management has exercised judgement in arriving at the estimated provision in respect of the potential liabilities.

Other

As at 31 December 2024, Other provisions of €28m (31 December 2023: €25m) primarily relates to indemnities and guarantees provided by the Group, along with warranties relating to the deleveraging of various asset portfolios.

31. Subordinated liabilities

	31 December 2024	31 December 2023
	€m	€m

At amortised cost:
€250m Tier 2 capital notes due August 2031, Callable 2026	257	257
	257	257

	31 December 2024	31 December 2023
	€m	€m

Maturity date
Repayable in less than 1 year	3	3
Repayable in greater than 1 year but less than 5 years	-	-
Repayable in greater than 5 years	254	254
	257	257

Tier 2 capital notes – PTSBGH

In May 2021, PTSBGH issued €250m of Tier 2 capital notes at a fixed rate of 3% per annum. The notes mature on 19 August 2031 with a call date of any date from and including 19 May 2026 to and including 19 August 2026. The call is subject to approval of the regulatory authorities, with approval conditional on meeting the requirements of the Capital Requirement Regulations.

The interest rate will be reset, in the event that the securities are not called, on 19 August 2026 to Euro 5 year Mid Swap rate plus a margin of 3.221% per annum. The loan is subordinated and ranks as Tier 2 capital with interest paid annually in arrears on 19 August. The loan may be subject to the exercise of Irish Statutory loss absorption powers by the relevant resolution authority.

The Tier 2 capital notes are currently hedged for fair value interest rate risk. At 31 December 2024, subordinated liabilities contain €5m hedge adjustment (31 December 2023: €5m). Further details on hedging are included in note 14 of the financial statements.

In the event of winding up of PTSBGH, the Tier 2 capital notes will be:

junior in right of payment to all Senior Claims;
pari passu with all other subordinated claims against PTSBGH which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 capital notes or that rank or are expressed to rank pari passu with the obligations of PTSBGH under Tier 2 capital notes; and
in priority to PTSBGH ordinary shares, preference shares, additional Tier 1 capital notes and junior subordinated obligations or other securities of PTSBGH which by law rank, or by their terms are expressed to rank, junior to the Tier 2 capital notes.

The Group did not have any defaults of principal or interest or other breaches with respect to its subordinated liabilities during the years ended 31 December 2024 and 31 December 2023.

Notes to the Consolidated Financial Statements (continued)

32. Leases

Right-of-use assets*	Land and buildings	Motor vehicles	Total
	€m	€m	€m

As at 1 January 2024	34	-	34
Additions	5	2	7
Lease exits and cancellations	-	-	-
Depreciation of right-of-use assets	(6)	(1)	(7)
Balance as at 31 December 2024	33	1	34

Right-of-use assets*	Land and buildings	Motor vehicles	Total
	€m	€m	€m

As at 1 January 2023	36	1	37
Additions	4	-	4
Lease exits and cancellations	-	-	-
Depreciation of right-of-use assets	(6)	(1)	(7)
Balance as at 31 December 2023	34	-	34

Lease liabilities*	Land and buildings	Motor vehicles	Total
	€m	€m	€m

As at 1 January 2024	35	-	35
Additions	5	2	7
Lease exits or cancellations	-	-	-
Repayment of lease liabilities	(6)	(1)	(7)
Balance as at 31 December 2024	34	1	35

Lease liabilities*	Land and buildings	Motor vehicles	Total
	€m	€m	€m

As at 1 January 2023	37	1	38
Additions	4	-	4
Lease exits or cancellations	-	-	-
Repayment of lease liabilities	(6)	(1)	(7)
Balance as at 31 December 2023	35	-	35

* Right-of-use assets are included in Property and equipment and lease liabilities are included in Other liabilities.

32. Leases (continued)

Lease liabilities	31 December 2024	31 December 2023
	€m	€m

Maturity analysis - contractual undiscounted cash flows*
Less than one year	6	7
One to five years	19	18
More than five years	12	12
Total undiscounted lease liabilities	37	37
Lease liabilities included in the statement of financial position	35	35
Current lease liability	6	6
Non-current lease liability	29	29

* The maturity analysis of undiscounted lease liabilities are disclosed in note 36.

Amounts recognised in income statement

	31 December 2024	31 December 2023
	€m	€m

Interest on lease liabilities*	(1)	(1)
Expenses relating to short-term leases	(1)	-
Depreciation of right-of-use assets	(7)	(7)
Total charge in income statement	(9)	(8)

* Interest expense on the lease liabilities amounted to €0.6m (31 December 2023: €0.9m) whereas expenses relating to short-term leases amounted to €0.8m (31 December 2023: €0.5m) and is included in Administrative, staff and other expenses (excluding exceptional items).

Amounts recognised in statement of cash flow

	31 December 2024	31 December 2023
	€m	€m

Operating cashflows:
Short-term leases	(1)	-
Financing cash flows:
Cash outflow for leases principal and interest	(7)	(7)
Total	(8)	(7)

As a lessee

(i) Real estate

The Group leases retail properties for its branch operations. The lease term of retail properties typically run for a period of 10-35 years. The Group does not have variable lease payments and its leases do not contain extension options.

(ii) Vehicles

The Group leases vehicles with lease terms of three to five years. The Group has no option to purchase the assets at the end of the contract term and it does not guarantee the residual value of the leased assets at the end of the contract term.

(iii) Sub-leases

The Group has no sub-leases as at 31 December 2024 (31 December 2023: no sub-leases). Further details on ‘leases as a lessor’ are included in note 1 of the financial statements.

Notes to the Consolidated Financial Statements (continued)

33. Share capital, reserves and other equity instruments

Share capital

Share capital is the funds raised as a result of a share issue and comprises the ordinary shares of the holding company Permanent TSB Group Holdings plc.

The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Bank. All ordinary shares rank equally with regard to the Bank’s residual assets.

Authorised share capital

31 December 2024		31 December 2024
	Number of shares	€m

Ordinary shares of €0.50 each	1,550,000,000	775

31 December 2023		31 December 2023
	Number of shares	€m

Ordinary shares of €0.50 each	1,550,000,000	775

Issued share capital

The movement in the number of paid up ordinary shares is as follows:

Balances as at 31 December 2024	€ 0.50 Ordinary shares	Total

As at 1 January 2024	545,589,119
Movement*	(592,943)
As at 31 December 2024	544,996,176
Issued share capital (€m)	272	272
Shares held under employee benefit trust	4,580
% of authorised capital issued		35%

Balances as at 31 December 2023	€ 0.50 Ordinary shares	Total

As at 1 January 2023	545,589,119
Movement	-
As at 31 December 2023	545,589,119
Issued share capital (€m)	273	273
Shares held under employee benefit trust	4,580
% of authorised capital issued		35%

* In 2024 Permanent TSB Group Holdings plc completed a share buyback of 592,943 ordinary shares at a price of €1.74 per ordinary share totalling €1m. The shares were recognised as treasury shares upon repurchase and were subsequently cancelled. The nominal amount, €0.30m, was transferred from share capital to the capital redemption reserve with the total repurchase amount of €1m being deducted from retained earnings in addition to €1m of related transaction costs. The number of ordinary shares in issue at 31 December 2024 was 544,996,176 (31 December 2023: 545,589,119).

33. Share capital, reserves and other equity instruments (continued)

Share Premium

The share premium reserve represents the excess of amounts received for share issues less associated issue costs over the par value of those shares of the Company.

Other Reserves

Revaluation reserve (Non-distributable)

The revaluation reserve is a non-distributable reserve comprising unrealised gains or losses, net of tax, on the revaluation of owner occupied properties.

Fair value reserve (Non-distributable)

The fair value reserve comprises:

the cumulative net change in the fair value of equity securities measured at FVOCI; and
the cumulative net change in the fair value of debt securities measured at FVOCI until the assets are derecognised or reclassified. This amount is increased by the amount of loss allowance and is disposed of by the end of the year.

Other capital reserves (Non-distributable)

Other capital reserves includes €1,087m capital issued by the Company net of €7m capital redemption reserve from the repurchase and cancellation of shares and €224m incurred in the cancellation of the share capital and share premium of PTSB on the incorporation of the Company. €1m was transferred into the capital redemption reserve during 2024 as a result of the share buyback.

Retained earnings

Retained earnings include distributable and non-distributable earnings. This reserve represents the retained earnings of the holding Company and subsidiaries after consolidation adjustments.

€43m (31 December 2023: €43m) coupon interest on the AT1 securities was paid from this reserve during 2024.

Other equity instruments – (Non-distributable)

Additional Tier 1 securities

	31 December 2024	31 December 2023
	€m	€m

As at 1 January	368	368
Profit	43	43
AT1 coupon paid	(43)	(43)
Additional Tier 1 securities	368	368

On 26 October 2022, PTSBGH issued additional €250m AT1 Fixed Rate Reset Perpetual Temporary Write Down Securities. The transaction costs incurred were €5m. The first reset date for the fixed rate is 26 April 2028. The AT1 securities are perpetual and redeemable financial instruments with a semi-annual coupon of 13.25% paid in arrears on 26 April and 26 October of each year, commencing on 26 April 2023. The Company may, at its sole discretion, redeem the AT1 securities in full on any day falling in the period commencing 26 October 2027 and the first reset date above and on every interest payment date thereafter (subject to the approval of the Supervisory Authority) at the prevailing principal amount together with accrued but unpaid interest. In addition, the securities are redeemable at the option of the Company for certain regulatory or tax reasons, subject to regulatory approval. On the first reset date on 26 April 2028, in the event the securities are not redeemed, interest will be reset to Euro 5 year Mid Swap rate plus a margin of 10.546% (converted from an annual to a semi-annual rate). The Company may elect at its full discretion at any time to cancel permanently (in whole or in part) the interest amount otherwise scheduled to be paid on an interest payment date.

On 25 November 2020, PTSBGH issued €125m nominal value of AT1 Perpetual Temporary Write Down Securities as part of a capital raise. The transaction costs incurred were €2m. The first reset date for the fixed rate is 25 May 2026. The AT1 securities are perpetual and redeemable financial instruments with a semi-annual coupon of 7.875% paid in arrears on 25 May and 25 November of each year. The Company may, at its sole discretion, redeem the AT1 securities in full on any day falling in the period commencing 25 November 2025 and the first reset date above and on every interest payment date thereafter (subject to the approval of the Supervisory Authority) at the prevailing principal amount together with accrued but unpaid interest. In addition, the securities are redeemable at the option of the Company for certain regulatory or tax reasons, subject to regulatory approval. On the first reset date on 25 May 2026, in the event the securities are not redeemed, interest will be reset to Euro 5 year Mid Swap rate plus a margin of 8.468% (converted from an annual to a semi-annual rate). The Company may elect at its full discretion at any time to cancel permanently (in whole or in part) the interest amount otherwise scheduled to be paid on an interest payment date.

Notes to the Consolidated Financial Statements (continued)

33. Share capital, reserves and other equity instruments (continued)

The Company may use such cancelled payments without restriction, including to make distributions or any other payments to the holders of its shares or any other securities issued by the Company. Any cancellation of interest payments will be permanent and on a non-cumulative basis and such cancellation will not give rise to or impose any restriction on the Company.

Under the EU (Bank Recovery and Resolution) Regulations 2015, these securities are loss absorbing at the point of non-viability.

On the occurrence of a trigger event, at any time, any accrued and unpaid interest up to (but excluding) the write down date shall be automatically and irrevocably cancelled, and the then Prevailing Principal Amount of each Security shall be automatically and irrevocably reduced by the write down amount. This will occur if the CET1 Capital Ratio of PTSB or the Group at any time falls below 7%. Subsequent to any write-down event the Company may, at its sole discretion, write-up some or all of the written-down principal amount of the AT1 instrument provided regulatory capital requirements and the securities rank behind the claims against the Group of all other subordinated and unsubordinated creditors.

34. Analysis of other comprehensive income

The analysis of other comprehensive income below provides additional analysis to the information provided in the primary statements and should be read in conjunction with the consolidated statement of changes in equity.

31 December 2024	Revaluation reserve	Fair value reserve	Total
	€m	€m	€m

Other comprehensive income/(expense) net of tax
Revaluation of property	(7)	-	(7)
Fair value reserve (equity instruments)
Change in fair value of equity instruments	-	3	3
Total other comprehensive income/(expense), net of tax	(7)	3	(4)

31 December 2023	Revaluation reserve	Fair value reserve	Total
	€m	€m	€m

Other comprehensive income/(expense) net of tax
Revaluation of property	(7)	-	(7)
Fair value reserve (equity instruments)
Change in fair value of equity instruments	-	3	3
Total other comprehensive income/(expense), net of tax	(7)	3	(4)

35. Measurement basis and fair values of financial instruments

The Group’s accounting policy on valuation of financial instruments is described in note 1. The table below sets out an overview of financial instruments held by the Group and their fair values.

(a) Measurement basis and fair value of financial instruments

31 December 2024	Note	Held at amortised cost	At fair value through OCI	At fair value through profit or loss	Designated as fair value hedges	Total carrying value	Fair value
		€m	€m	€m	€m	€m	€m

Financial assets
Cash at bank	12	72	-	-	-	72	72
Items in course of collection	12	23	-	-	-	23	23
Loans and advances to banks	13	2,202	-	-	-	2,202	2,202
Derivative financial instruments	14	-	-	-	59	59	59
Other assets	15	7	-	-	-	7	7
Debt securities	17	4,327	-	-	-	4,327	4,253
Equity securities	18	-	9	-	-	9	9
Loans and advances to customers	20	21,423	-	-	-	21,423	21,456

Financial liabilities
Deposits by banks	26	105	-	-	-	105	105
Customer accounts	27	24,120	-	-	-	24,120	24,062
Derivative financial instruments	14	-	-	-	-	-	-
Debt securities in issue	28	1,698	-	-	33	1,731	1,822
Other financial liabilities	29	129	-	-	-	129	129
Subordinated liabilities	31	252	-	-	5	257	250

31 December 2023	Note	Held at amortised cost	At fair value through OCI	At fair value through profit or loss	Designated as fair value hedges	Total carrying value	Fair value
		€m	€m	€m	€m	€m	€m

Financial assets
Cash at bank	12	71	-	-	-	71	71
Items in course of collection	12	40	-	-	-	40	40
Loans and advances to banks	13	2,051	-	-	-	2,051	2,051
Derivative financial instruments	14	-	-	-	36	36	36
Other assets	15	60	-	-	-	60	60
Debt securities	17	3,256	-	-	-	3,256	3,137
Equity securities	18	-	5	-	-	5	5
Loans and advances to customers	20	21,427	-	-	-	21,427	21,343

Financial liabilities
Deposits by banks	26	398	-	-	-	398	398
Customer accounts	27	22,966	-	-	-	22,966	22,907
Derivative financial instruments	14	-	-	1	-	1	1
Debt securities in issue	28	1,498	-	-	14	1,512	1,593
Other financial liabilities	29	148	-	-	-	148	148
Subordinated liabilities	31	252	-	-	5	257	240

Notes to the Consolidated Financial Statements (continued)

35. Measurement basis and fair values of financial instruments (continued)

The following table sets out the fair value of financial instruments that the Group holds at 31 December 2024. It categorises these financial instruments into the relevant level on the fair value hierarchy.

The fair values of financial instruments are measured according to the following fair value hierarchy:

Level 1 – financial assets and liabilities measured using quoted market prices (unadjusted).
Level 2 – financial assets and liabilities measured using valuation techniques which use observable inputs including quoted prices of financial instruments themselves or quoted prices of similar instruments – in either active or inactive markets.
Level 3 – financial assets and liabilities measured using valuation techniques which use unobservable market data inputs.

Basis and fair values of financial instruments

31 December 2024	Note	Total carrying value	Level 1	Level 2	Level 3	Total fair value
		€m	€m	€m	€m	€m

Financial assets
Cash at bank	12	72	72	-	-	72
Items in course of collection	12	23	-	23	-	23
Loans and advances to banks	13	2,202	-	2,202	-	2,202
Derivative financial instruments	14	59	-	59	-	59
Debt securities	17	4,327	4,145	108	-	4,253
Equity securities	18	9	7	-	2	9
Loans and advances to customers	20	21,423	-	-	21,456	21,456

Financial liabilities
Deposits by banks	26	105	-	105	-	105
Customer accounts	27	24,120	-	24,062	-	24,062
Derivative financial instruments	14	-	-	-	-	-
Debt securities in issue	28	1,731	-	1,822	-	1,822
Other financial liabilities	29	129	-	129	-	129
Subordinated liabilities	31	257	-	250	-	250

31 December 2023	Note	Total carrying value	Level 1	Level 2	Level 3	Total fair value
		€m	€m		€m	€m
Financial assets
Cash at bank	12	71	71	-	-	71
Items in course of collection	12	40	-	40	-	40
Loans and advances to banks	13	2,051	-	2,051	-	2,051
Derivative financial instruments	14	36	-	36	-	36
Debt securities	17	3,256	3,137	-	-	3,137
Equity securities	18	5	-	-	5	5
Loans and advances to customers	20	21,427	-	-	21,343	21,343

Financial liabilities
Deposits by banks	26	398	-	398	-	398
Customer accounts	27	22,966	-	22,907	-	22,907
Derivative financial instruments	14	1	-	1	-	1
Debt securities in issue	28	1,512	-	1,593	-	1,593
Other financial liabilities	29	148	-	148	-	148
Subordinated liabilities	31	257	-	240	-	240

35. Measurement basis and fair values of financial instruments (continued)

(b) Fair value measurement principles

The Group’s accounting policy on valuation of financial instruments is described in note 1 and note 2 and contains details on the critical accounting estimates and judgements made by management in relation to the fair value measurement of financial instruments. The fair value of a financial instrument is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Where possible, the Group calculates fair value using observable market prices in an active market. Where market prices are not available, fair values are determined using valuation techniques. These techniques are subjective in nature and may involve assumptions which are based upon management’s view of market conditions at year end, which may not necessarily be indicative of any subsequent fair value. Any minor changes in the assumptions used could have a significant impact on the resulting estimated fair values and, as a result, it may be difficult for the users to make a reasonable comparison of the fair value information disclosed in this note, against that disclosed by other financial institutions or to evaluate the Group’s financial position and, therefore, are advised to exercise caution in interpreting these fair values. Also, the fair values disclosed above do not represent, nor should it be interpreted to represent, the underlying value of the Group as a going concern at the reporting date.

Financial assets and financial liabilities not subsequently measured at fair value

Other than derivative financial instruments and equity securities, all other financial assets and liabilities are not measured at fair value at the reporting date. A description of the methods and assumptions used to calculate fair values of these assets and liabilities is set out below.

Cash at bank

The fair value of these financial instruments is equal to their carrying value due to these instruments being repayable on demand and short-term in nature in an active market.

Items in course of collection

The fair value of these financial instruments is equal to their carrying value due to these instruments being repayable on demand and short-term in nature.

Loans and advances to banks

For the purposes of fair value valuation, loans and advances to banks have been treated as cash and cash equivalents. These loans and advances are repayable on demand and short-term in nature; hence, the fair value of each financial instrument is equal to their carrying value.

Loans and advances to customers

Loans and advances to customers are carried net of impairments. The Group uses a discounted cash flow valuation model to estimate the fair value for the ROI residential and commercial mortgages. Cash flows are discounted using the current weighted average interest rate based on the specific portfolio. The fair value calculation also takes into account loan impairment provisions at the balance sheet date. The carrying value of the consumer finance portfolio is considered equal to its fair value due to its short duration.

Debt securities (HTC securities)

Debt securities at 31 December 2024 are €4,327m (31 December 2023: €3,256m) and consist of HTC securities. HTC securities are derived from observable inputs through independent pricing sources such as Bloomberg.

Deposits by banks/customer accounts

The estimated fair value of deposit liabilities and current accounts with no stated maturity which are repayable on demand (including non-interest bearing deposits), approximates to their carrying value. The estimated fair value of fixed-interest bearing deposits and other borrowings is based on discounted cash flows using interest rates for new deposits with similar remaining maturities.

Debt securities in issue/subordinated liabilities

The fair values of debt securities in issue/subordinated liabilities are derived from observable inputs through independent pricing sources such as Bloomberg. All instruments are hedged for interest rate risk. Further details on hedging are included in note 14 of the financial statements. Where a readily available market price is unavailable in relation to the instrument, an estimated price is calculated using observable market data for similar instruments. If observable market data is not available, an appropriate credit spread linked to similar instruments, is used within the valuation technique. The fair values of debt securities in issue and subordinated liabilities include the fair value hedge adjustment in relation to interest rate swaps. Since 2023, due to changes in market conditions, quoted prices in active markets are no longer available for these instruments. However, there is sufficient information available to measure the fair value of these instruments based on observable market inputs. Therefore, debt securities in issue and subordinated liabilities are now classified as Level 2 in the fair value hierarchy.

Notes to the Consolidated Financial Statements (continued)

35. Measurement basis and fair values of financial instruments (continued)

Financial assets and financial liabilities subsequently measured at fair value

On initial recognition, all financial instruments are measured at fair value. Derivative financial instruments are fair valued through profit or loss.

Derivative financial instruments

The fair values of derivatives are determined using valuation techniques such as discounted cash flow and pricing models which are commonly used by market participants. These valuations are provided by third party sources and the models used incorporate observable market inputs such as current interest rate, time to maturity, forward foreign exchange rates, yield curves and volatility measures.

Equity securities

PTSB Group holds Series A and Series B preferred stock in Visa Inc. at 31 December 2024. The Series A preferred stock was issued from Visa Inc during 2024 upon the conversion of Series B preferred stock. At 31 December 2024, PTSB Group holds Series A preferred stock with a value of €7m and Series B preferred stock with a value of €2m in Visa Inc (31 December 2023: €5m Series B preferred stock). This is recognised in the statement of financial position at FVOCI.

The fair values of the Series A preferred stock in Visa Inc. is classified as Level 1 and the fair value of the Series B preferred stock is classified as Level 3, as the valuation of these preferred stock includes inputs that are based on unobservable data.

Fair value measurements recognised in the Statement of financial position

31 December 2024	Note	Level 1	Level 2	Level 3	Total
		€m	€m	€m	€m

Financial assets measured at fair value
Derivative financial instrument	14	-	59	-	59
Equity instruments	18	7	-	2	9

Financial liabilities measured at fair value
Derivative financial instrument	14	-	-	-	-

31 December 2023	Note	Level 1	Level 2	Level 3	Total
		€m	€m	€m	€m

Financial assets measured at fair value
Derivative financial instrument	14	-	36	-	36
Equity instruments	18	-	-	5	5

Financial liabilities measured at fair value
Derivative financial instrument	14	-	1	-	1

Reconciliation of level 3 fair value measurements of financial assets

	2024	2023
	€m	€m

Equity Instruments
As at 1 January	5	4
Revaluation movement in OCI – Fair value reserve (equity instruments)	4	1
Conversion of Series B preferred stock to Series A preferred stock	(7)	-
As at 31 December	2	5

There were no transfers between level 1, level 2 or level 3 of the fair value hierarchy during 2024 or 2023 for financial assets except for the conversion of Series B preferred stock to Series A preferred stock.

35. Measurement basis and fair values of financial instruments (continued)

Level 3 fair value measurements of financial liabilities

There were no transfers between level 1, level 2 or level 3 of the fair value hierarchy during 2024 or 2023 for financial liabilities.

Level 3 sensitivity analysis

The table below sets out information about significant unobservable inputs used in measuring financial instruments categorized as Level 3 in the fair value hierarchy.

Financial instruments

31 December 2024

Valuation technique

Significant unobservable inputs

Range of estimates for unobservable inputs

Fair value

€m

Ranges of estimates

changes in the fair value

Visa Inc. Series B Preferred Stock

Quoted market price (Discounted)*

Final share conversion rate

0 - 90%

0 – 90%

* Discount has been applied for illiquidity and the conversion rate variability of the Visa Inc. Series B Preferred stock.

31 December 2023

Valuation technique

Significant unobservable

inputs

Range of estimates for

unobservable inputs

Fair value

€m

Ranges of estimates

changes in the fair value

Visa Inc. Series B Preferred Stock

Quoted market price (Discounted)*

Final share conversion rate

0 – 90%

* Discount has been applied for illiquidity and the conversion rate variability of the Visa Inc. Series B Preferred stock.

Significant unobservable inputs

Visa Inc. Series B preferred stock

The Series B preferred stock was fair valued at €2m at 31 December 2024 (31 December 2023: €5m) and is recognised in the statement of financial position at FVOCI.

Valuation Methodology: The Visa Inc. Class A Common stock price and conversion ratios were applied to the PTSB shareholding of Visa Inc. Series B preferred shares at 31 December 2024 and 31 December 2023. Future conversions are calculated using discounted cash follows. The stock was revalued at the year-end exchange rate.

Unobservable input: The unobservable inputs are the discount factor used to discount the future conversions of Series B preferred stock.

The Visa Inc. Series B preferred stock is denominated in US dollars and is exposed to FX risk.

Notes to the Consolidated Financial Statements (continued)

36. Financial risk management

Maximum exposure to credit risk before collateral held or other credit enhancements

The following table outlines the maximum exposure to credit risk before collateral held or other credit enhancements in respect of the Group’s financial assets as at the statement of financial position date.

	Note	31 December 2024	31 December 2023
		€m	€m

Cash at bank	12	72	71
Items in course of collection	12	23	40
Loans and advances to banks (iii)	13	2,202	2,051
Derivative financial instruments (ii)	14	59	36
Other assets	15	7	60
Debt securities (i)	17	4,327	3,256
Loans and advances to customers (iv)	20	21,423	21,427
		28,113	26,941
Commitments	41	1,618	1,380
		29,731	28,321

The following tables outline the Group’s exposure to credit risk by asset class

(i) Debt securities

The Group is exposed to the credit risk on third parties where the Group holds debt securities (primarily sovereign debt). These exposures are subject to the limitations contained within Board approved policies, with sovereign debt restricted to those countries that have an External Credit Assessment Institution (ECAI) rating of investment grade.

The following table gives an indication of the level of creditworthiness of the Group’s debt securities and is based on the ratings prescribed by Moody’s Investor Services Limited and Standard and Poor’s for the EU. There are no impaired debt securities as at 31 December 2024 or at 31 December 2023, with the exception of the corporate bond.

	31 December 2024	31 December 2023
	€m	€m

Rating
Aaa	726	309
Aa1	292	30
Aa2	-	356
Aa3	2,116	1,578
A3	439	448
Baa1	599	432
Baa3	155	103
Total	4,327	3,256

36. Financial risk management (continued)

The following table discloses, by country, the Group’s exposure to sovereign debt and corporate debt as at:

	31 December 2024	31 December 2023
	€m	€m

Country
Ireland	1,524	1,559
EU	658	309
Spain	599	432
France	578	356
Portugal	439	448
Austria	292	30
Italy	155	103
Belgium	82	19
Total	4,327	3,256

(ii) Derivative financial instruments

The Group has executed standard ISDA agreements with all of its counterparties. The Group has also executed CSAs with all of its counterparties in respect of all derivative instruments to mitigate its credit risk. As part of these agreements, the Group exchanges collateral in line with movements in the market values of derivative positions daily. FX forward derivatives are settled gross. The Group manages its collateral derivative positions with counterparties on a net basis. The uncollateralised derivative positions are held with investment grade counterparties. The cumulative positive market value of derivative assets at 31 December 2024 was €59m (31 December 2023: €36m) which relates to fair value hedge interest rate swaps used to hedge interest rate risk on fixed rate debt securities in issue. See note 14 for further detail.

(iii) Loans and advances to banks

The Group has a policy to ensure that, where possible, loans and advances to banks are held with investment grade counterparties with any exceptions subject to prior approval by the BRCC. The following table gives an indication of the level of creditworthiness of the Group’s loans and advances to banks and is based on the ratings prescribed by Moody’s Investor Services Limited and Standard and Poor’s for the CBI.

	31 December 2024	31 December 2023
	€m	€m

Rating
AAA	1,887	1,687
Aa1	23	-
Aa2	6	75
Aa3	125	231
A1	90	2
A2	71	56
Total	2,202	2,051

Notes to the Consolidated Financial Statements (continued)

36. Financial risk management (continued)

The following sections detail additional disclosures on asset quality.

(iv) Loans and advances to customers

Gross customer loans and advances

The tables below outline total loans and advances to customers for the Group analysed by home loan, buy-to-let, commercial, consumer finance and finance leases and hire purchase receivables.

	31 December 2024	31 December 2023
Measured at amortised cost	€m	€m

Residential mortgages:
Home loan	19,539	19,557
Buy-to-let	464	749
Total residential mortgages	20,003	20,306
Commercial	493	437
Consumer finance	553	499
Finance leases and hire purchase receivables	466	446
Total measured at amortised cost	21,515	21,688

Analysed by ECL staging:
Stage 1	19,100	19,057
Stage 2	2,033	1,913
Stage 3	382	718
POCI	-	-
Total measured at amortised cost	21,515	21,688

Of which at the reporting date
Neither past due nor Stage 3	21,081	20,909
Past due but not Stage 3	52	61
Stage 3	382	718
Total measured at amortised cost	21,515	21,688
Of which are reported as non-performing loans	382	718
Deferred fees, discounts and business combination related fair value adjustments	300	309

The following tables provide an aged analysis of home loan, buy-to-let and commercial mortgages which are past due but not Stage 3.

31 December 2024	Home loans	Buy-to-let	Commercial	Total
	€m	€m	€m	€m

0-30 days	24	1	2	27
31-60 days	4	-	-	4
61-90 days	7	-	-	7
Total past due not Stage 3	35	1	2	38
Fair value of collateral held	35	1	2	38

36. Financial risk management (continued)

	Home loans	Buy-to-let	Commercial	Total
Fair value of collateral held	€m	€m	€m	€m

0-30 days	24	1	2	27
31-60 days	4	-	-	4
61-90 days	7	-	-	7
Total past due not Stage 3	35	1	2	38

31 December 2023	Home loans	Buy-to-let	Commercial	Total
	€m	€m	€m	€m

0-30 days	29	3	1	33
31-60 days	7	3	1	11
61-90 days	6	-	-	6
Total past due not Stage 3	42	6	2	50
Fair value of collateral held	42	6	2	50

Fair value of collateral held	Home loans	Buy-to-let	Commercial	Total
	€m	€m	€m	€m

0-30 days	29	3	1	33
31-60 days	7	3	1	11
61-90 days	6	-	-	6
Total past due not Stage 3	42	6	2	50

Collateral held against residential mortgages is principally comprised of residential properties; their fair value has been estimated based upon the last actual valuation, adjusted to take into account subsequent movement in house prices and is capped at the lower of the loan balance or the valuation amount.

Non-performing loans

Non-performing loans (NPLs) are loans which are credit impaired or loans which are classified as defaulted in accordance with the Group’s definition of default. The Group’s definition of default considers objective indicators of default including the 90 days past due criterion, evidence of exercise of concessions or modifications to terms and conditions is designed to be consistent with European Banking Authority (EBA) guidance on the definition of forbearance.

Foreclosed assets are assets held on the balance sheet which are obtained by taking possession of collateral or by calling on similar credit enhancements.

Notes to the Consolidated Financial Statements (continued)

36. Financial risk management (continued)

Non-performing assets are defined as NPLs plus foreclosed assets.

31 December 2024	Stage 3
	Home loans	Buy-to-let	Commercial	Consumer finance	Finance leases and hire purchase receivables	Total
	€m	€m	€m	€m	€m	€m

NPL is < 90 days	113	29	17	6	4	169
NPL is > 90 days and < 1 year past due	55	10	-	4	2	71
NPL is 1-2 years past due	34	11	2	2	1	50
NPL is 2-5 years past due	30	12	1	3	1	47
NPL is > 5 years past due	27	9	4	5	-	45
POCI	-	-	-	-	-	-
Non-performing loans	259	71	24	20	8	382
Foreclosed assets	2	5	-	-	-	7
Non-performing assets	261	76	24	20	8	389
NPLs as % of gross loans	1.3%	15.3%	4.9%	3.6%	1.7%	1.8%

31 December 2023	Stage 3
	Home loans	Buy-to-let	Commercial	Consumer finance	Finance leases and hire purchase receivables	Total
	€m	€m	€m	€m	€m	€m

NPL is < 90 days	167	86	11	4	6	274
NPL is > 90 days and < 1 year past due	77	51	2	4	4	138
NPL is 1-2 years past due	44	16	1	2	1	64
NPL is 2-5 years past due	60	86	1	2	1	150
NPL is > 5 years past due	55	28	5	4	-	92
POCI	-	-	-	-	-	-
Non-performing loans	403	267	20	16	12	718
Foreclosed assets	2	9	-	-	-	11
Non-performing assets	405	276	20	16	12	729
NPLs as % of gross loans	2.1%	35.6%	4.6%	3.2%	2.7%	3.3%

Non-performing loans as a percentage of total loans and advances was 1.8% at 31 December 2024, down from 3.3% at 31 December 2023, primarily attributed to the Glas III loan sale.

Total portfolio loss allowance: statement of financial position

The tables below outline the ECL loss allowance total at 31 December 2024 in respect of total customer loans and advances.

The impairment write-back in respect of the total loans and advances for year ended 31 December 2024 was €30m, compared to a €56m charge for the year ended 31 December 2023.

	31 December 2024	31 December 2023
	€m	€m

Loss allowance - statement of financial position
Stage 1	123	165
Stage 2	134	164
Stage 3	135	241
Total loss allowance	392	570

36. Financial risk management (continued)

	31 December 2024	31 December 2023
	%	%

Provision coverage ratio*
Stage 1	0.6%	0.9%
Stage 2	6.6%	8.6%
Stage 3	35.4%	33.5%
Total provisions/total loans	1.8%	2.6%

* Provision coverage ratio is calculated as loss allowance/impairment provision as a percentage of gross loan balance.

Origination profile

Loan origination profile of the residential mortgage loan portfolio before provision for impairment:

The table below illustrates that €2bn or 8% (31 December 2023: 9%) of the residential mortgage portfolio originated before 2006. Between 2006 and 2008 origination was €3bn or 17% (31 December 2023: 21%) of the residential mortgages. The remaining 75% (31 December 2023: 70%) of residential mortgages were originated between 2009 and 2024.

31 December 2024	Residential mortgages portfolio		Stage 3 residential mortgages portfolio
	Number	Balance	Number	Balance
		€m		€m

2001 and before	4,110	91	251	7
2002	2,549	93	112	5
2003	4,077	191	149	11
2004	6,125	386	173	13
2005	10,033	793	332	34
2006	12,520	1,326	496	76
2007	10,755	1,276	452	79
2008	6,776	779	279	42
2009	2,056	190	61	6
2010	852	58	14	1
2011	731	58	7	1
2012	1,143	98	13	1
2013	1,549	143	17	2
2014	2,646	263	14	2
2015	3,709	397	38	3
2016	4,362	557	38	5
2017	5,348	763	42	7
2018	6,911	1,116	56	8
2019	8,863	1,564	60	10
2020	7,394	1,475	47	6
2021	8,349	1,859	31	5
2022	9,415	2,416	14	3
2023	8,291	2,173	9	2
2024	7,047	1,938	4	1
Total	135,611	20,003	2,709	330

Notes to the Consolidated Financial Statements (continued)

36. Financial risk management (continued)

31 December 2023	Residential mortgages portfolio		Stage 3 residential mortgages portfolio
	Number	Balance	Number	Balance
		€m		€m

2000 and before	3,055	64	253	8
2001	2,004	60	114	4
2002	2,811	116	139	8
2003	4,443	232	219	16
2004	7,579	471	278	25
2005	11,015	943	454	61
2006	13,837	1,624	753	174
2007	11,944	1,591	773	209
2008	7,407	925	452	97
2009	2,311	212	73	8
2010	914	66	22	2
2011	789	65	9	1
2012	1,225	108	18	1
2013	1,638	158	17	2
2014	2,877	294	26	4
2015	3,949	442	52	4
2016	4,665	617	46	7
2017	5,642	843	49	6
2018	7,352	1,239	71	11
2019	9,408	1,735	64	12
2020	7,820	1,624	39	5
2021	9,065	2,135	20	3
2022	9,618	2,539	8	1
2023	8,394	2,203	4	1
Total	139,762	20,306	3,953	670

Loan-to-value profile

Loan-to-value (LTV) of mortgage lending (index linked):

The LTV ratio is calculated at a property level and is the average of indexed property values in proportion to the outstanding loan balance. LTV is a key input to the impairment provisioning process. The tables below outline the composition of this ratio for the residential loan portfolio.

36. Financial risk management (continued)

Actual and average LTVs across principal mortgage portfolios:

The tables below outline the weighted average LTVs for the total residential mortgage portfolios analysed across home loan and buy-to-let facilities by value. The weighted average LTV on the residential mortgage portfolios is 48% at 31 December 2024 compared to 52% at 31 December 2023.

31 December 2024	Home loans	Buy-to-let	Total
	%	%	%

Less than 50%	54%	51%	54%
50% to 70%	33%	26%	33%
71% to 90%	13%	11%	12%
91% to 100%	-	4%	1%
Subtotal	100%	92%	100%

101% to 110%	-	2%	-
111% to 120%	-	2%	-
121% to 130%	-	1%	-
131% to 140%	-	-	-
141% to 150%	-	1%	-
151% to 160%	-	-	-
161% to 170%	-	-	-
171% to 180%	-	-	-
Greater than 180%	-	2%	-
Subtotal	-	8%	-

Total	100%	100%	100%
Weighted average LTV:
Stock of residential mortgages at year end	48%	56%	48%
Residential mortgages originated in the year	68%	51%	68%
Acquired residential mortgages	-	-	-
Stage 3 mortgages	53%	106%	64%

Notes to the Consolidated Financial Statements (continued)

36. Financial risk management (continued)

31 December 2023	Home loans	Buy-to-let	Total
	%	%	%

Less than 50%	45%	33%	45%
50% to 70%	38%	23%	37%
71% to 90%	16%	18%	16%
91% to 100%	-	8%	1%
Subtotal	99%	82%	99%

101% to 110%	1%	6%	1%
111% to 120%	-	2%	-
121% to 130%	-	3%	-
131% to 140%	-	2%	-
141% to 150%	-	1%	-
151% to 160%	-	1%	-
161% to 170%	-	1%	-
171% to 180%	-	-	-
Greater than 180%	-	2%	-
Subtotal	1%	18%	1%

Total	100%	100%	100%
Weighted average LTV:
Stock of existing residential mortgages	52%	70%	52%
Residential mortgages originated in the year	69%	55%	69%
Acquired residential mortgages	47%	41%	47%
Stage 3 mortgages	68%	100%	81%

Analysis by LTV of the Group’s residential mortgage lending which is neither past due nor Stage 3:

The tables below illustrate that 100% of residential home loan mortgages (31 December 2023: 100%) and 97% of residential buy-to-let mortgages (31 December 2023: 95%) that are neither past due nor stage 3 are in positive equity as at 31 December 2024.

31 December 2024	Home loans	Buy-to-let	Total
	%	%	%

Less than 50%	54%	58%	54%
50% to 70%	33%	28%	33%
71% to 90%	13%	9%	13%
91% to 100%	-	2%	-
Subtotal	100%	97%	100%

101% to 110%	-	2%	-
111% to 120%	-	1%	-
121% to 130%	-	-	-
131% to 140%	-	-	-
141% to 150%	-	-	-
151% to 160%	-	-	-
161% to 170%	-	-	-
171% to 180%	-	-	-
Greater than 180%	-	-	-
Subtotal	-	3%	-

Total	100%	100%	100%

36. Financial risk management (continued)

31 December 2023	Home loans	Buy-to-let	Total
	%	%	%

Less than 50%	46%	48%	46%
50% to 70%	38%	29%	38%
71% to 90%	16%	14%	16%
91% to 100%	-	4%	-
Subtotal	100%	95%	100%

101% to 110%	-	2%	-
111% to 120%	-	1%	-
121% to 130%	-	-	-
131% to 140%	-	1%	-
141% to 150%	-	-	-
151% to 160%	-	-	-
161% to 170%	-	-	-
171% to 180%	-	-	-
Greater than 180%	-	1%	-
Subtotal	-	5%	-

Total	100%	100%	100%

Analysis by LTV of the Group’s residential mortgage lending which are classified as Stage 3:

The tables below illustrate that 92% of residential home loan mortgages (31 December 2023: 83%) and 68% of residential buy-to-let mortgages (31 December 2023: 60%) that are classified as Stage 3 are in positive equity as at 31 December 2024.

31 December 2024	Home loans	Buy-to-let	Total
	%	%	%

Less than 50%	54%	12%	45%
50% to 70%	26%	18%	24%
71% to 90%	10%	21%	12%
91% to 100%	2%	17%	6%
Subtotal	92%	68%	87%

101% to 110%	2%	6%	3%
111% to 120%	2%	8%	3%
121% to 130%	1%	3%	1%
131% to 140%	-	1%	1%
141% to 150%	1%	1%	1%
151% to 160%	-	1%	-
161% to 170%	-	1%	-
171% to 180%	-	1%	-
Greater than 180%	2%	10%	4%
Subtotal	8%	32%	13%

Total	100%	100%	100%

	€m	€m	€m
Stage 3	259	71	330

Notes to the Consolidated Financial Statements (continued)

36. Financial risk management (continued)

31 December 2023	Home loans	Buy-to-let	Total
	%	%	%
Less than 50%	38%	7%	26%
50% to 70%	24%	11%	19%
71% to 90%	15%	26%	19%
91% to 100%	6%	16%	10%
Subtotal	83%	60%	74%

101% to 110%	3%	13%	7%
111% to 120%	3%	6%	4%
121% to 130%	2%	8%	4%
131% to 140%	1%	2%	2%
141% to 150%	2%	2%	2%
151% to 160%	2%	2%	2%
161% to 170%	1%	2%	1%
171% to 180%	-	1%	1%
Greater than 180%	3%	4%	3%
Subtotal	17%	40%	26%

Total	100%	100%	100%

	€m	€m	€m
Stage 3	403	267	670

(v) Group portfolios: Collateral in possession

Collateral in possession occurs where the obligor either (i) voluntarily surrenders the property or (ii) the Group takes legal ownership due to the non-repayment of the loan facility. The following tables outline the main movements in this category during the year.

Stock of collateral in possession

	31 December 2024		31 December 2023
	Number	Balance outstanding at transfer of ownership	Number	Balance outstanding at transfer of ownership
Residential collateral in possession		€m		€m
Home loans	8	5	10	6
Buy-to-let	30	7	52	13
Total	38	12	62	19

Collateral in possession assets are sold as soon as practicable. These assets which total €7m as at 31 December 2024 (31 December 2023: €11m) are included in assets held for sale (see note 16 for further details).

During the year no ownership of properties were transferred to the Group.

31 December 2024	Number of disposals	Balance outstanding at transfer of ownership	Gross sales proceeds	Costs to sell	Pre provisioning loss on sale*
		€m	€m	€m	€m
Collateral in possession
Home loans	2	1	1	-	-
Buy-to-let	22	6	4	-	2
Year ended 31 December 2024	24	7	5	-	2

* Calculated as gross sales proceeds less balance outstanding at transfer of ownership less costs to sell. These losses are provided for as part of the impairment provisioning process.

36. Financial risk management (continued)

31 December 2023	Number of disposals	Balance outstanding at transfer of ownership	Gross sales proceeds	Costs to sell	Pre provisioning loss on sale*
		€m	€m	€m	€m

Collateral in possession
Home loans	4	1	2	1	-
Buy-to-let	57	16	10	-	6
Year ended 31 December 2023	61	17	12	1	6

* Calculated as gross sales proceeds less balance outstanding at transfer of ownership less costs to sell. These losses are provided for as part of the impairment provisioning process.

(vi) Additional disclosures on forborne loans

The Group operates a number of mechanisms which are designed to assist borrowers experiencing credit and loan repayment difficulties, which have been developed in accordance with the current Code of Conduct on Mortgages Arrears (CCMA).

The tables below analyse loans for which the Group has entered formal temporary and permanent forbearance arrangements with customers for the years ended 31 December 2024 and 2023.

(a) Weighted Average - LTV

LTV on total residential mortgages in forbearance

The tables below illustrate that 94% of residential home loan mortgages (31 December 2023: 89%) and 75% of residential buy-to-let mortgages (31 December 2023: 73%) that are in forbearance are in positive equity as at 31 December 2024.

31 December 2024	Home loans	Buy-to-let	Total
	%	%	%

Less than 50%	54%	16%	49%
50% to 70%	27%	18%	26%
71% to 90%	10%	26%	12%
91% to 100%	3%	15%	4%
Subtotal	94%	75%	91%

101% to 110%	1%	3%	2%
111% to 120%	2%	9%	2%
121% to 130%	1%	3%	1%
131% to 140%	-	1%	1%
141% to 150%	1%	1%	1%
151% to 160%	-	2%	-
161% to 170%	-	1%	-
171% to 180%	-	-	-
Greater than 180%	1%	5%	2%
Subtotal	6%	25%	9%

Total	100%	100%	100%
Weighted average LTV:
Stock of residential mortgages	52%	85%	57%
Residential mortgages originated in the year	72%	-	72%
Stage 3 mortgages	58%	94%	64%

Notes to the Consolidated Financial Statements (continued)

36. Financial risk management (continued)

31 December 2023	Home loans	Buy-to-let	Total
	%	%	%

Less than 50%	42%	10%	37%
50% to 70%	29%	13%	26%
71% to 90%	13%	36%	17%
91% to 100%	5%	14%	6%
Subtotal	89%	73%	86%

101% to 110%	2%	10%	3%
111% to 120%	2%	3%	2%
121% to 130%	1%	3%	2%
131% to 140%	1%	2%	2%
141% to 150%	1%	2%	1%
151% to 160%	1%	1%	1%
161% to 170%	1%	1%	1%
171% to 180%	-	1%	-
Greater than 180%	2%	4%	2%
Subtotal	11%	27%	14%

Total	100%	100%	100%
Weighted average LTV:
Stock of residential mortgages	61%	91%	66%
Residential mortgages originated in the year	66%	-	66%
Stage 3 mortgages	71%	99%	76%

(b) Forbearance arrangements - mortgages

The tables below set out the volume of loans for which the Group has entered formal temporary and permanent forbearance arrangements with customers as at 31 December 2024 and 31 December 2023.

(i) Residential home loan mortgages:

The incidence of the main type of forbearance arrangements for owner occupied residential mortgages are analysed below:

31 December 2024	All loans		Stage 3
	Number	Balances	Number	Balances
		€m		€m

Interest only	8	1	6	1
Reduced payment (less than interest only)	32	6	26	4
Reduced payment (greater than interest only)	842	117	416	61
Payment moratorium	65	9	45	6
Arrears capitalisation	550	59	348	38
Term extension	355	25	178	13
Hybrid*	150	15	118	12
Split mortgages**	74	10	74	10
Total	2,076	242	1,211	145

* Hybrid is a combination of two or more forbearance arrangements.

** Split mortgage is where a portion of outstanding debt is deferred until financial ability or circumstances improve.

36. Financial risk management (continued)

31 December 2023	All loans		Stage 3
	Number	Balances	Number	Balances
		€m		€m

Interest only	19	4	17	3
Reduced payment (less than interest only)	47	8	32	6
Reduced payment (greater than interest only)	1,362	193	672	105
Payment moratorium	48	7	33	4
Arrears capitalisation	821	88	419	49
Term extension	481	34	232	19
Hybrid*	238	33	178	24
Split mortgages**	158	26	158	26
Total	3,174	393	1,741	236

* Hybrid is a combination of two or more forbearance arrangements.

** Split mortgage is where a portion of outstanding debt is deferred until financial ability or circumstances improve.

The tables above reflect a decrease of 1,098 cases in the year to 31 December 2024 for the Group in the number of residential home loan mortgages in forbearance arrangements, a decrease of €151m in balances. The average balance of forborne loans is €0.117m at 31 December 2024 (31 December 2023: €0.124m).

(ii) Residential buy-to-let mortgages:

The incidence of the main type of forbearance arrangements for residential buy-to-let mortgages are analysed below:

31 December 2024	All loans		Stage 3
	Number	Balances	Number	Balances
		€m		€m

Interest only	6	3	5	3
Reduced payment (less than interest only)	2	1	2	1
Reduced payment (greater than interest only)	46	11	34	9
Payment moratorium	4	1	4	1
Arrears capitalisation	10	3	7	2
Term extension	16	3	10	2
Hybrid*	34	11	24	7
Split mortgages**	4	1	4	1
Total	122	34	90	26

* Hybrid is a combination of two or more forbearance arrangements.

** Split mortgage is where a portion of outstanding debt is deferred until financial ability or circumstances improve.

Notes to the Consolidated Financial Statements (continued)

36. Financial risk management (continued)

31 December 2023	All loans		Stage 3
	Number	Balances	Number	Balances
		€m		€m

Interest only	16	6	14	6
Reduced payment (less than interest only)	2	2	2	2
Reduced payment (greater than interest only)	82	25	61	21
Payment moratorium	3	1	1	-
Arrears capitalisation	24	6	10	3
Term extension	16	4	12	3
Hybrid*	61	28	46	19
Split mortgages**	22	7	22	7
Total	226	79	168	61

* Hybrid is a combination of two or more forbearance arrangements.

** Split mortgage is where a portion of outstanding debt is deferred until financial ability or circumstances improve.

The tables above reflect a decrease of 104 cases in the year to 31 December 2024 for the Group in the number of residential buy-to-let in forbearance arrangements, a decrease of €45m in balances. The average balance of forborne loans is €0.279m at 31 December 2024 (31 December 2023: €0.350m).

(iii) Commercial mortgages

The incidence of the main type of forbearance arrangements for commercial mortgages are analysed below:

	31 December 2024		31 December 2023
	Number	Balances	Number	Balances
		€m		€m

Commercial mortgages
Interest only	1	-	-	-
Reduced payment (greater than interest only)	4	1	7	3
Payment moratorium	-	-	-	-
Arrears capitalisation	11	1	24	2
Term extension	5	1	7	1
Hybrid*	2	1	4	1
Split mortgages	-	-	-	-
Total	23	4	42	7

* Hybrid is a combination of two or more forbearance arrangements.

The table above reflects a decrease of 19 cases in the year to 31 December 2024 for the Group in the number of commercial mortgages in forbearance arrangements, a decrease of €3m in balances.

(c) Reconciliation of movement in forborne loans for all classes

The tables below provide an analysis of the movement of total forborne loans and Stage 3 forborne loans during the year. It outlines the number and balances of forbearance treatments offered, expired and loans paid down during the year.

36. Financial risk management (continued)

(i) Reconciliation of movement of total forborne loans

	Residential mortgages
	Home loans cases	Home loans balances	Buy -to-let cases	Buy-to-let balances	Commercial cases	Commercial balances	Total cases	Total balances
31 December 2024		€m		€m		€m		€m

Opening balance 1 January 2024	3,174	393	226	79	42	7	3,442	479
New forbearance extended during the year*	310	37	17	3	2	1	329	41
Deleveraged loans	(543)	(83)	(81)	(33)	(4)	(1)	(628)	(117)
Exited forbearance
- re-classified to Stage 3 non-forborne	(5)	(1)	(1)	-	-	-	(6)	(1)
- expired forbearance treatment	(749)	(77)	(23)	(5)	(12)	(1)	(784)	(83)
- expired loan paid down	(111)	(17)	(16)	(9)	(5)	(2)	(132)	(28)
Balance shift**	-	(10)	-	(1)	-	-	-	(11)
Closing balance of loans in forbearance as at 31 December 2024	2,076	242	122	34	23	4	2,221	280

* Balance movements are stated net of portfolio re-classification.

** Balance movements in respect of loans which are in forbearance at the start and end of the year.

	Residential mortgages
	Home loans cases	Home loans balances	Buy -to-let cases	Buy-to-let balances	Commercial cases	Commercial balances	Total cases	Total balances
31 December 2023		€m		€m		€m		€m

Opening balance 1 January 2023	2,747	358	256	99	25	8	3,028	465
New forbearance extended during the year*	1,133	118	35	7	23	1	1,191	126
Deleveraged loans	-	-	-	-	-	-	-	-
Exited forbearance
- re-classified to Stage 3 non-forborne	(24)	(3)	(4)	(3)	(1)	-	(29)	(6)
- expired forbearance treatment	(450)	(52)	(30)	(15)	(2)	(1)	(482)	(68)
- expired loan paid down	(232)	(18)	(31)	(6)	(3)	-	(266)	(24)
Balance shift**	-	(10)	-	(3)	-	(1)	-	(14)
Closing balance of loans in forbearance as at 31 December 2023	3,174	393	226	79	42	7	3,442	479

* Balance movements are stated net of portfolio re-classification.

** Balance movements in respect of loans which are in forbearance at the start and end of the year.

Notes to the Consolidated Financial Statements (continued)

36. Financial risk management (continued)

(ii) Reconciliation of movement in forborne loans Stage 3

	Home loan cases	Home loan balances	Buy-to-let cases	Buy-to-let balances	Commercial cases	Commercial balances	Total cases	Total balances
31 December 2024		€m		€m		€m		€m

Opening balance 1 January 2024	1,741	236	168	61	27	6	1,936	303
New Stage 3 forborne extended during the year*	319	38	18	5	2	1	339	44
Deleveraged loans	(542)	(83)	(81)	(33)	(4)	(1)	(627)	(117)
Exited forborne Stage 3, now performing forborne	(272)	(30)	(9)	(2)	(3)	-	(284)	(32)
Exited forbearance
- exited forborne Stage 3, now Stage 3 non-forborne	(3)	(1)	-	-	-	-	(3)	(1)
- expired forbearance treatment	(11)	-	-	-	-	-	(11)	-
- expired loan paid down	(21)	(11)	(6)	(5)	(4)	(2)	(31)	(18)
Balance shift**	-	(4)	-	-	-	-	-	(4)
Closing balance of loans in forbearance as at 31 December 2024	1,211	145	90	26	18	4	1,319	175

* Balance movements are stated net of portfolio re-classification

** Balance movements in respect of loans which are in forbearance at the start and end of the year.

	Home loan cases	Home loan balances	Buy-to-let cases	Buy-to-let balances	Commercial cases	Commercial balances	Total cases	Total balances
31 December 2023		€m		€m		€m		€m

Opening balance 1 January 2023	1,634	228	188	68	19	6	1,841	302
New Stage 3 forborne extended during the year*	615	69	30	11	12	-	657	80
Deleveraged loans	-	-	-	-	-	-	-	-
Exited forborne Stage 3, now performing forborne	(352)	(43)	(21)	(11)	-	-	(373)	(54)
Exited forbearance
- exited forborne Stage 3, now Stage 3 non-forborne	(12)	(1)	-	-	(1)	-	(13)	(1)
- expired forbearance treatment	(13)	(3)	(4)	(2)	(1)	-	(18)	(5)
- expired loan paid down	(131)	(12)	(25)	(5)	(2)	-	(158)	(17)
Balance shift**	-	(2)	-	-	-	-	-	(2)
Closing balance of loans in forbearance as at 31 December 2023	1,741	236	168	61	27	6	1,936	303

* Balance movements are stated net of portfolio re-classification.

** Balance movements in respect of loans which are in forbearance at the start and end of the year.

36. Financial risk management (continued)

(vii) Funding profile

The below amounts for non-derivative financial liabilities is calculated using undiscounted cash flows which include an estimate of future interest payments. Derivative liabilities include contractual undiscounted cash flows on a gross basis if the instrument is settled gross and on a net basis if settled net.

The ALCo monitors sources of funding and their respective maturities with a focus on establishing a stable and cost effective funding profile. Excluding equity, the Group’s funding profile as at the 31 December 2024 can be broken down into the below component parts:

	31 December 2024	31 December 2023
	%	%

Customer accounts	91	91
Long-term debt	8	7
Short-term debt	1	2
	100	100

Long-term debt refers to debt with a maturity greater than 12 months from year-end and short-term debt is that which has a maturity of less than 12 months from year-end.

In accordance with IFRS 7, Financial Instruments: Disclosures, the following tables present the maturity analysis of financial liabilities on an undiscounted basis, by remaining contractual maturity at the statement of financial position date. These will not agree directly with the balances on the consolidated statement of financial position due to the inclusion of future interest payments.

31 December 2024	Up to	1-3	3-6	6-12	1-2	Over 2
	1 month	months	months	months	years	years	Total
	€m	€m	€m	€m	€m	€m	€m

Liabilities
Deposits by banks	105	-	-	-	-	-	105
Customer accounts	18,051	1,593	949	2,031	967	631	24,222
Debt securities in issue	8	16	24	49	97	1,864	2,058
Derivative financial instruments	-	-	-	-	-	-	-
Subordinated liabilities	1	1	2	4	7	285	300
Other financial liabilities	95	-	2	3	6	25	131
Total liabilities	18,260	1,610	977	2,087	1,077	2,805	26,816

31 December 2023	Up to	1-3	3-6	6-12	1-2	Over 2
	1 month	months	months	months	years	years	Total
	€m	€m	€m	€m	€m	€m	€m

Liabilities
Deposits by banks	398	-	-	-	-	-	398
Customer accounts	19,640	664	415	864	671	764	23,018
Debt securities in issue	8	15	23	46	384	1,366	1,842
Derivative financial instruments	1	-	-	-	-	-	1
Subordinated liabilities	1	1	2	4	7	292	307
Other financial liabilities	115	-	2	3	5	25	150
Total liabilities	20,163	680	442	917	1,067	2,447	25,716

Notes to the Consolidated Financial Statements (continued)

36. Financial risk management (continued)

The maturity analysis for credit commitments and guarantees are presented in Note 41.

When managing the Group’s liquidity and funding profile, for products where the contractual maturity date may be different from actual behaviour, the Group uses statistical methodologies to manage liquidity on an expected or behaviourally adjusted basis.

The following table details the Group’s liquidity analysis for derivative instruments that do not qualify as hedging instruments. The table has been drawn up based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis and the undiscounted gross inflows and outflows on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest rates from the yield curves at the end of the reporting year.

31 December 2024	Up to	1-3	3-6	6-12	1-2	Over 2
	1 month	months	months	months	years	years	Total
	€m	€m	€m	€m	€m	€m	€m

Gross settled:
FX forwards
- inflow	52	-	-	-	-	-	52
- outflow	(52)	-	-	-	-	-	(52)
Balance at 31 December 2024	-	-	-	-	-	-	-

31 December 2023	Up to	1-3	3-6	6-12	1-2	Over 2
	1 month	months	months	months	years	years	Total
	€m	€m	€m	€m	€m	€m	€m

Gross settled:
FX forwards
- inflow	58	-	-	-	-	-	58
- outflow	(59)	-	-	-	-	-	(59)
Balance at 31 December 2023	(1)	-	-	-	-	-	(1)

(viii) Interest rate gap position

Gap analysis is a technique for measuring the Group’s interest rate risk exposure beginning with a maturity/re-pricing schedule that distributes interest sensitive assets, liabilities, and derivative positions into “time bands” according to their maturity (if fixed rate), time remaining to their next re-pricing (if floating rate) or behavioural convention in order to identify any sources of significant mismatches. The below December 2024 IRRBB (Interest Rate Risk in the Banking Book) profile also includes interest cash flows based on the next re-price date i.e. one month’s interest included for variable rate products and interest until the end of the fixed rate period for fixed rate products. The Non-maturity Deposits are assumed to have a maximum behavioural maturity of 7 years.

A summary of the Group’s interest rate gap position is as follows:

Interest rate re-pricing

31 December 2024	Not more than 3 months	Over 3 months but not more than 6 months	Over 6 months but not more than 1 year	Over 1 year but not more than 5 years	Over 5 years	Total
	€m	€m	€m	€m	€m	€m

Assets	10,261	1,156	2,494	13,437	2,314	29,662
Liabilities	(6,347)	(1,657)	(3,650)	(13,491)	(4,367)	(29,512)
Derivatives	(1,843)	51	-	2,049	-	257
Interest rate re-pricing gap	2,071	(450)	(1,156)	1,995	(2,053)	407

Cumulative interest rate re-pricing gap	2,071	1,621	465	2,460	407

36. Financial risk management (continued)

31 December 2023	Not more than 3 months	Over 3 months but not more than 6 months	Over 6 months but not more than 1 year	Over 1 year but not more than 5 years	Over 5 years	Total
	€m	€m	€m	€m	€m	€m

Assets	9,806	999	2,224	13,574	2,018	28,621
Liabilities	(6,438)	(1,152)	(2,434)	(13,420)	(4,570)	(28,014)
Derivatives	(1,155)	343	-	978	-	166
Interest rate re-pricing gap	2,213	190	(210)	1,132	(2,552)	773

Cumulative interest rate re-pricing gap	2,213	2,403	2,193	3,325	773

Sensitivity analysis

The following table outlines the sensitivity of the Bank’s NII to a change in interest rates. The NII sensitivity is calculated on a constant balance sheet basis in line with the EBA Guidelines on Interest Rate Risk in the Banking Book (EBA 2022/03).

31 December 2024	100bps	200bps
	m	m

Upwards	19	38
Downwards	(14)	(29)

31 December 2023	100bps	200bps
	m	m

Upwards	32	65
Downwards	(31)	(62)

37. Capital management

The core objective of the Group’s capital management policy is to ensure that the Group complies with its regulatory capital requirements and maintains sufficient capital to cover its business risks and support its strategy. The Group has an established Internal Capital Adequacy Assessment Process (ICAAP) to ensure that it is adequately capitalised against the inherent risks to which its business operations are exposed and to maintain an appropriate level of capital to meet the minimum capital requirements. The Board has overall responsibility for the completeness and implementation of the ICAAP. The ICAAP is subject to review and evaluation by the Regulator.

The management of capital within the Group is monitored on an ongoing basis by the Board and various Executive Committees in accordance with Board approved policy.

The Group’s regulatory capital comprises of three Tiers:

CET1 Capital, consisting of ordinary share capital, share premium, retained earnings and other regulatory adjustments relating to items that are included in equity but are treated differently for capital adequacy purposes;
Tier 1 Capital, consisting of CET1 capital and qualifying convertible perpetual financial instruments with discretionary coupons; and
Total Capital, consisting of Tier 1 capital and qualifying subordinated liabilities, revaluation reserves and other regulatory capital adjustments.

The Group’s 31 December 2024 regulatory Pillar 2 Requirement (P2R) remains at 3.25% (31 December 2023: 3.25%).

Notes to the Consolidated Financial Statements (continued)

37. Capital management (continued)

The Group’s 31 December 2024 regulatory CET1 capital requirement is 10.33% (31 December 2023: 9.83%). The CET1 ratio requirement of 10.33% consists of Pillar 1 minimum requirement of 4.50% (31 December 2023: 4.50%), P2R of 1.83%* (31 December 2023: 1.83%), Capital Conservation Buffer (CCB) of 2.50% (31 December 2023: 2.50%) and Countercyclical Buffer (CCyB) of 1.5% (31 December 2023: 1.0%).

The Group’s Total Capital requirement of 15.25% at 31 December 2024 (31 December 2023: 14.75%) consists of Pillar 1 minimum requirement of 8% (31 December 2023: 8%), P2R of 3.25% (31 December 2023: 3.25%), CCB of 2.50% (31 December 2023: 2.50%) and CCyB of 1.50% (31 December 2023: 1.0%).

An Other Systemically Important Institution (O-SII) buffer of 0.5% is effective 1 January 2025, increasing CET1 and Total Capital regulatory requirements to 10.83% and 15.75% respectively.

These requirements exclude Pillar 2 Guidance (P2G) which is not publicly disclosed.

* 56.25% of P2R must be made up of CET1

38. Current/non-current assets and liabilities

The following table provides an analysis of certain asset and liability line items as at 31 December 2024 and 31 December 2023. The analysis includes amounts expected to be recovered or settled no more than 12 months after the statement of financial position date (current) and more than 12 months after the statement of financial position date (non-current).

		31 December 2024			31 December 2023
	Note	Current	Non-current	Total	Current	Non-current	Total
		€m	€m	€m	€m	€m	€m

Assets
Cash and balances at central banks	12	72	-	72	71	-	71
Items in the course of collection	12	23	-	23	40	-	40
Loans and advances to banks	13	2,202	-	2,202	2,051	-	2,051
Derivative financial instruments	14	-	59	59	6	30	36
Other assets	15	7	-	7	60	-	60
Assets classified as held for sale	16	12	-	12	12	-	12
Debt securities	17	138	4,189	4,327	190	3,066	3,256
Equity securities	18	-	9	9	-	5	5
Prepayments and contract assets	19	63	-	63	80	-	80
Loans and advance to customers	20	2,685	18,738	21,423	2,775	18,652	21,427

Liabilities
Deposits by banks including central banks	26	105	-	105	398	-	398
Customer accounts	27	22,557	1,563	24,120	21,558	1,408	22,966
Derivative financial instruments	14	-	-	-	1	-	1
Debt securities in issue	28	56	1,675	1,731	54	1,458	1,512
Other liabilities	29	100	29	129	119	29	148
Accruals		12	-	12	13	-	13
Provisions	30	13	33	46	13	27	40
Subordinated liabilities	31	3	254	257	3	254	257

39. Transfer of financial assets

In the ordinary course of business, the Group enters into transactions that result in the transfer of financial assets of loans and advances to customers and debt securities. In accordance with note 1.5 (vii), the transferred financial assets continue to be either recognised in their entirety or to the extent of the Group’s continuing involvement, or are derecognised in their entirety.

The Group transfers financial assets primarily through the following transactions:

1. sale and repurchase of securities; and

2. securitisation activities in which loans and advances to customers are sold to Structured Entities (SEs) that in turn issue notes to investors which are collateralised by purchased assets.

39. Transfer of financial assets (continued)

(a) Transferred financial assets that are not derecognised in their entirety

Sale and repurchase agreements

Sale and repurchase agreements are transactions in which the Group sells a security and simultaneously agrees to repurchase it (or an asset that is substantially the same) at a fixed price on a future date. The Group continues to recognise the securities in their entirety in the statement of financial position as loans and advances to customers (note 20) and debt securities (note 17) because it retains substantially all the risks and rewards of ownership. The cash consideration received is recognised as a financial asset and a financial liability is recognised for the obligation to pay the repurchase price. As the Group sells the contractual rights to the cash flows of the securities it does not have the ability to use or pledge as collateral the transferred assets during the term of the arrangement. The carrying value of repurchase agreements at 31 December 2024 is €65m (31 December 2023: €380m).

Securitisations

The Group sells loans and advances to customers to SEs that in turn issue notes to investors which are collateralised by the purchased assets. For the purpose of disclosure in this note, a transfer of such financial assets may arise if the Group sells assets to a consolidated SE, the transfer of financial assets is from the Group (that includes the consolidated SE) to investors in the notes issued by the SE. The transfer is in the form of the Group assuming an obligation to pass cash flows from the underlying assets to investors in the notes.

Although the Group does not own more than half of the voting power of the Fastnet entities, it has the power to control the relevant activities of the SE and the ability to affect the variable returns of the investee and hence these SEs are consolidated. In these cases, the consideration received from the investors in the notes in the form of cash is recognised as a financial asset and a corresponding financial liability is recognised. Therefore, the Group is exposed to substantially all the risks and rewards of ownership including credit and market risk of the transferred assets.

When the Group transfers assets as part of the securitisation transactions it does not have the ability to use or pledge as collateral the transferred assets during the term of the arrangement.

The table below sets out an overview of carrying amounts and fair values related to transferred financial assets that are not derecognised in their entirety and associated liabilities.

	31 December 2024		31 December 2023
	Sale and repurchase agreements	Securitisations	Sale and repurchase agreements	Securitisations
	€m	€m	€m	€m

Carrying amount of assets	377	-	530	-
Carrying amount of associated liabilities	365	-	382	-

Liabilities that have recourse only to the transferred financial assets
Fair value of assets	371	-	529	-
Fair value of associated liabilities	365	-	382	-
Net position	6	-	147	-

(b) Transferred financial assets that are derecognised in their entirety

The Group has not transferred any financial assets that were derecognised in their entirety where the Group has continuing involvement in a transferred asset.

Notes to the Consolidated Financial Statements (continued)

40. Offsetting financial assets and financial liabilities

In accordance with IAS 32, Financial Instruments: Presentation, the Group reports financial assets and financial liabilities on a net basis on the statement of financial position only if there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. This is disclosed in the table below in the “Effect of offsetting on the statement of financial position” section.

The gross amounts of derivative assets and liabilities and their net amounts disclosed in the below tables have been measured in the statement of financial position at fair value.

The tables below also disclose (in the “Related amounts not offset in the statement of financial position” section) the impact of master netting agreements and other similar agreements on all derivative financial instruments and similar financial instruments that are subject to master netting agreements or similar agreements, but do not qualify for netting on the balance sheet. The similar financial instruments include securitisations and sale and repurchase agreements. The similar agreements include global master repurchase agreements. It highlights the amounts that could be potentially offset on the statement of financial position and those amounts covered by collateral placed with or by counterparties to these trades.

The tables highlight the amounts that have been offset on the statement of financial position and those amounts covered by collateral placed with or by counterparties to these trades. It does not highlight where right of offset is available in the event of a default, as allowed under ISDA master agreements.

The tables below also provide analysis of derivative financial assets and liabilities and repurchase and reverse repurchase agreements subject to offsetting, enforceable master netting agreements and global master repurchase agreements:

	31 December 2024
	Effect of offsetting on the Statement of financial position			Related amounts not offset in the statement of financial position
	Gross financial assets/ (liabilities) recognised	Gross financial (liabilities)/assets offset	Net amounts reported on the statement of financial position	Financial instruments	Cash collateral	Net amount
	€m	€m	€m	€m	€m	€m

Assets
Derivative financial instruments	59	-	59	-	(39)	20
Reverse Repurchase Agreements	300	(300)	-	-	(1)	(1)
	359	(300)	59	-	(40)	19

Liabilities
Derivative financial instruments	-	-	-	-	-	-
Repurchase Agreements	365	(300)	65	(65)	-	-
	365	(300)	65	(65)	-	-

	31 December 2023
	Effect of offsetting on the statement of financial position			Related amounts not offset in the statement of financial position
	Gross financial assets/ (liabilities) recognised	Gross financial (liabilities)/ assets offset	Net amounts reported on the statement of financial position	Financial instruments	Cash collateral	Net amount
	€m	€m	€m	€m	€m	€m

Assets
Derivative financial instruments	36	-	36	-	(16)	20
	36	-	36	-	(16)	20

Liabilities
Derivative financial instruments	(1)	-	(1)	-	-	(1)
Repurchase Agreements	380	-	380	(126)	2	256
	379	-	379	(126)	2	255

41. Commitments and Contingencies

The table below gives the contractual amounts of irrevocable capital commitments. Even though these obligations are not recognised in statement of financial position they do involve credit risk. The maximum exposure to credit loss under commitments is the contractual amount of the instrument in the event of non-performance by the other party where all counter claims, collateral or security prove worthless. The transfer of economic resources is uncertain and cannot be reasonably measured to be recognised on the SOFP.

Credit commitments	31 December 2024	31 December 2023
	€m	€m

Guarantees and irrevocable letters of credit	2	2

Commitments to extend credit
- less than 1 year	1,573	1,333
- 1 year and over	43	45
Total commitments to extend credit	1,616	1,378

Total credit commitments	1,618	1,380

Other contingencies

The Group, like all other banks, is subject to litigation in the normal course of its business. Based on legal advice, other than matters referred to in note 30, the Group does not believe that any such litigation will have a material effect on its income statement or SOFP.

A number of different statutory and regulatory bodies, including the CBI, commenced investigations into a series of transactions involving deposits placed by Irish Life Assurance plc with Irish Bank Resolution Corporation (formerly Anglo Irish Bank) (on 31 March 2008, 26 September 2008, 29 September 2008 and 30 September 2008). While these investigations commenced a number of years ago, they were put on hold pending the determination of criminal proceedings against a number of individuals in respect of the same transactions. The Bank understands that those criminal proceedings have concluded and so the Bank is waiting to see if the investigations, which, from the Bank’s perspective, have been dormant for some time will now be re-commenced.

As part of the agreement in August 2011 to dispose of Irish Life International Limited, the Group provided certain indemnities and warranties to the purchaser under a number of identified scenarios. If the Bank is required to make any reimbursements under these identified scenarios, the impact on the financial statements could be material. Based on the facts currently known, it is not practicable at this time to predict the final outcome this could have, nor the timing and possible impact on the Bank.

Like other banks, in the normal course of business, customers bring complaints to the Financial Services and Pensions Ombudsman (FSPO) in relation to a variety of issues. The Bank considers the applicability of FSPO decisions and findings to other customers in similar circumstances. The Bank provides for these cases, where, based on legal advice, the directors believe that it is more likely than not that an outflow of resources embodying economic benefits, will be required to settle a present obligation arising from a past event. The Bank is involved in High Court appeals against two FSPO decisions in tracker mortgage related complaints and, while the timing and outcome of the appeals is uncertain, based on legal advice received, no provision has been made for these cases. However, if the Bank is unsuccessful in the appeals, the impact on the financial statements could be material. Based on the facts currently known and the current stages that the legal process is at, it is not practicable at this time to predict the final outcome of this litigation/FSPO complaints, nor the timing and possible impact on the Bank. The Bank is aware that there are other legal proceedings on-going in which decisions of the FSPO, upholding customers’ claims to a tracker interest rate on their mortgage, are being challenged. While the facts of each case differ, the Bank is keeping other cases under review to see whether any issues raised in these other proceedings could have implications for the Bank’s on-going appeals and its position in respect of whether there could be a liability to customers who have accounts which are similar to the accounts which are the subject of the Bank’s appeals.

As at 31 December 2024 ECL of €4m (31 December 2023: €nil) held against loan commitments are recognised in Provisions (Note 30), except where the loan commitment relates to a loan already recognised as a financial asset. In this case the ECL is recognised in Loans and advances to customers.

On 1 July 2022, the Group invested in First Home Scheme Ireland DAC, along with the State, AIB and Bank of Ireland. The Group committed €54m in funding to the First Home Scheme Ireland DAC. €20m was recognised in the Statement of Financial Position in respect of the scheme as at 31 December 2024 (31 December 2023: €15m).

In late 2024, the Group announced the opening of a limited voluntary severance scheme. The applications have now closed and are currently being evaluated. The estimated cost of the scheme is €25m. At 31 December 2024, the Group did not have a present obligation as applications were still open and therefore it has not met the recognition criteria for a provision under IAS 37 and is not recognised on the SOFP.

Notes to the Consolidated Financial Statements (continued)

42. Related Parties

Related parties include individuals and entities that can exercise significant influence on operational and financial policies of the Group.

The Group has a related party relationship with its Directors, Senior Executives, the Group’s pension schemes, the Minister for Finance and with the Irish Government and Irish Government related entities on the basis that the Irish Government is deemed to have control over the Group.

(a) Directors’ and Secretary’s interest

The interests of the Directors and the Company Secretary, including interests of their close family members in the share capital of the Company are as follows:

Number of beneficial ordinary shares held		31 December 2024	31 December 2023
		Ordinary	Ordinary
	Position	shares	shares

Julie O’Neill	Chairperson	20,000	10,000
Eamonn Crowley	Chief Executive Officer	50,000	50,000
Nicola O’Brien (retired 29 August 2024)	Chief Financial Officer	-	-
Conor Ryan	Company Secretary	10	10
Ronan O’Neill	Non-Executive Director	-	4
Donal Courtney (retired 01 October 2024)	Non-Executive Director	-	-
Ruth Wandhöfer	Non-Executive Director	-	-
Marian Corcoran	Non-Executive Director	4,500	-
Paul Doddrell	Non-Executive Director	4,046	-
Celine Fitzgerald	Non-Executive Director	6,227	-
Anne Bradley	Non-Executive Director	6,227	-
Catherine Moroney	Non-Executive Director	7,462	-
Rick Gildea	Non-Executive Director	-	-

Conor Ryan, as trustee of the employee benefit trust set up under the terms of the long-term incentive plan, has non-beneficial interest in 4,580 shares held in the plan (31 December 2023: 4,580).

There were no transactions in the above Directors’ and Secretary’s interests between 31 December 2024 and 3 March 2025.

Details of the Directors’ remuneration is included in the Directors’ Remuneration Report on pages 125 to 129.

(b) Transactions with key management personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group. Key management personnel include Non-Executive Directors, Executive Directors and members of the Executive Committee (ExCo). The Executive Directors and members of the ExCo are listed below:

Members of the ExCo at 31 December 2024

Eamonn Crowley	Chief Executive
Barry D’Arcy	Chief Risk Officer
Patrick Farrell	Chief Retail Banking Officer
Tom Hayes	Chief Technology Officer
Ger Mitchell	Chief Customer and People Officer
Andrew Walsh	Chief Legal Counsel
Peter Vance	Chief Operations Officer
Leontia Fannin	Chief Sustainability and Corporate Affairs Officer

42. Related Parties (continued)

During the year ended 31 December 2024, the following key management personnel changes occurred;

Nicola O’Brien resigned as a member of ExCo and the Board on 29 August 2024 and Leontia Fannin was appointed Chief Sustainability and Corporate Affairs Officer on 1 August 2024.

Non-Executive Directors are compensated by way of fees. In certain circumstances, expenses incurred by Non-Executive Directors during the normal course of business are paid by the Group and are included in taxable benefits. The compensation of Executive Directors and members of the ExCo comprises salary and other benefits together with pension benefits. Previously they also participated in the Group’s profit sharing, share option schemes and long-term incentive plans. No awards have been issued under these schemes and plans since 2008.

Number of key management personnel as at year end is as follows:

	31 December 2024	31 December 2023

Non-Executive Directors	9	10
Executive Directors and Senior Management	8	8
	17	18

(b) (i) Total compensation to Executive and Non-Executive Directors is as follows:

	Year ended	Year ended
	31 December 2024	31 December 2023
	€’000	€’000

Fees	1,038	1,063
Taxable benefits	3	4
Salary and other benefits	789	920
Loss of office payments*	172	-
Pension benefits
- defined contribution	140	158
Total	2,142	2,145

* Relates to payments to former CFO

Total compensation to other key management personnel is as follows:

	Year ended	Year ended
	31 December 2024	31 December 2023
	€’000	€’000

Taxable benefits	4	9
Salary and other benefits	2,709	2,852
Pension benefits
- defined contribution	397	365
Total	3,110	3,226

There were no connected persons to key management personnel employed by the group during 2024 or 2023.

Notes to the Consolidated Financial Statements (continued)

42. Related Parties (continued)

(b) (ii) Balances and transactions with key management personnel:

In the normal course of its business, the Group had loan balances and transactions with key management personnel and their connected persons. The loans are granted on normal commercial terms and conditions with the exception of certain home loans where Executive Directors and Senior Managers may avail of subsidised loans on the same terms as other eligible management of the Group. All of the loans in the scope of the related party guidelines as outlined under the Companies Act 2014, the Central Bank Related Party lending code 2013 and IAS 24 Related party disclosures are secured, and all interest and principal due at the statement of financial position date has been repaid on schedule and therefore, no provision for loan impairment is required. Total outstanding balances of loans, credit cards, overdrafts and deposits are as follows:

	31 December 2024	31 December 2023
	€’000	€’000

Balances
Loans	1,734	1,147
Unsecured credit card balances and overdrafts	48	8
Deposits	1,209	4,139

	Year ended	Year ended
	31 December 2024	31 December 2023
	€’000	€’000

Transactions during the year
Loan advances	56	-
Loan repayments	302	56
Interest received on loans	46	45
Interest paid on deposits	(7)	(2)

Loans to Directors

31 December 2024	Balance as at 1 Jan	Advances during the year	Principal repaid	Balance as at 31 Dec	Interest paid	Maximum balance
	€’000	€’000	€’000	€’000	€’000	€’000

Ronan O’Neill*	629	250	13	866	27	879
Eamonn Crowley**	2	40	2	40	-	42
Catherine Moroney*	-	17	4	13	1	17
	631	307	19	919	28	938

31 December 2023	Balance as at 1 Jan	Advances during the year	Principal repaid	Balance as at 31 Dec	Interest paid	Maximum balance
	€’000	€’000	€’000	€’000	€’000	€’000

Ronan O’Neill*	640	-	11	629	20	640
	640	-	11	629	20	640

* Represents a loan for a person connected with this Director in accordance with section 307(3) of the Companies Act 2014.

** Includes a loan for a person connected with this Director in accordance with section 307(3) of the Companies Act 2014.

42. Related Parties (continued)

(c) Irish Government and Irish Government related entities

The Minister for Finance continues to be the majority shareholder of the Group (and the ultimate controlling party per IAS 24). The Irish Government is recognised as a related party as the Government is deemed to have control over the Group as defined by IAS 24. The Group has applied the amended IAS 24 which exempts an entity from the related party disclosure requirements in respect of the Government and Government related entities unless transactions are individually or collectively significant. In the normal course of business, the Group has entered into transactions with the Government and Government related entities involving deposits and senior debt.

The following are transactions and balances between the Group and the Government and Government related entities that are collectively significant:

The Group holds securities issued by the Government of €1,524m (31 December 2023: €1,559m).
The Group had an investment in associated undertakings of €20m for the year ended 31 December 2024 involving participants that are deemed related parties due to the common ownership by the Government. The amount and nature is referenced in note 22.
The Group entered into banking transactions in the normal course of business with local Government and Semi-State Institutions such as local authorities and county councils. These transactions principally include the granting of loans, the acceptance of deposits and clearing transactions.
A bank levy imposed by the Government through the Finance Bill 2014 is payable in the second half of each calendar year. A bank levy payable to government, is provided for on the occurrence of the event identified by the legislation that triggers the obligation to pay the levy. In 2024, the amount recognised in the income statement was €23m (31 December 2023: €22m).
During 2024, the Group also paid €nil DGS fees to the CBI (2023: €28m) as part of the Deposit Guarantee Scheme.
During 2013, following the Transfer Order requested by the Central Bank and issued by the High Court dated 10 November 2013, the Group acquired certain assets, liabilities, books and records of Newbridge Credit Union (NCU) and all its employees transferred to the Group. As part of this transaction, along with the assets and liabilities of NCU, a cash financial incentive of €23m was paid from the Credit Institutions Resolution Fund, which forms part of the Financial Incentives Agreement (FIA) signed between the Central Bank and the Group dated 10 November 2013. It was also agreed in the FIA that the Central Bank will use the Credit Institution Resolution Fund to compensate the Group for 50% of any future impairment losses incurred on NCU loans and advances to customers. Similarly, it was also agreed that if any provision write-backs or future recoveries of previously written off NCU loans and advances to customers occurs, the Group will pay a cash amount equivalent to 50% of the provision write-back or the recoveries to the Credit Institutions Resolution Fund. As per the FIA, this arrangement will continue for ten years from the transfer date. During 2024 the FIA concluded, at 31 December 2024 the Group recorded a payable of €nil due under the FIA (31 December 2023: €2.4m).

(d) Other related party transactions

At 31 December 2024 the Company had an intercompany balance of €1,731m (31 December 2023: €1,512m) with its principal subsidiary PTSB plc relating to the MREL issuance.
In November 2020, PTSB Group made an investment of €123m in PTSB plc. This investment was through the issuance of AT1 securities by the Company. In October 2022, PTSB Group made an additional investment of €245m in PTSB plc through the issuance of AT1 securities by the Company.
In May 2021, PTSB plc borrowed €250m from the Group at a fixed rate of 3% per annum plus a margin of 0.181% per annum which mature on 19 August 2031. The loan is subordinated and ranks as Tier 2 capital notes with interest paid annually in arrears on 19 August.

43. Sale of loans and advances to customers

Project Glas III

In July 2024, the Group agreed the sale of a non-performing portfolio (Glas III). The portfolio’s gross balance on the Statement of Financial Position as at the date of derecognition was €341m with a carrying amount of €208m.

In line with IFRS 9, the assets have been derecognised from the Statement of Financial Position.

As a result of the transaction, a €9m loss was recorded through the impairment line of the income statement. On 1 November 2024, the deal completed with the receipt of the sale proceeds.

Notes to the Consolidated Financial Statements (continued)

44. Principal subsidiary undertakings and interest in subsidiaries and structured entities

Under IFRS 10 ‘Consolidated financial statements’, the Group has control over an entity when it has the power to direct relevant activities that significantly affect the investee return, it is exposed or has rights to variable returns from its involvement in the investee and has the ability to affect those returns through its powers over the entity.

A subsidiary is considered material if the value of the consolidated total assets at the end of the financial year of the subsidiary and the entities it controls (if any) is more than 1% of the total assets of the Group.

The key subsidiary of the parent meeting the criteria outlined above is:

Name and registered office	Nature of business	Incorporated in	% of ordinary shares held

Held directly by the company:
Permanent TSB plc 56-59 St. Stephen’s Green, Dublin 2	Retail banking	Ireland	100

In presenting details of the principal subsidiary undertakings, the exemption permitted by section 315 (a) (i) of the Companies Act 2014 in relation to disclosing related undertaking net assets or profit or loss, has been availed of, and the Company will annex a full listing of Group undertakings to its annual return to the Companies Registration Office.

The reporting date for each of the Group’s principal subsidiary entities is 31 December.

The principal country of operation of each company is the country in which it is incorporated.

The registered office of Permanent TSB Group Holdings plc is 56-59 St. Stephen’s Green, Dublin 2.

(a) Company’s interest in subsidiary undertakings

The Company is the ultimate holding company of the Group while PTSB is a 100% subsidiary of the Company. The investment in PTSB is carried at the recoverable amount in the holding company statement of financial position.

At 31 December 2024 the investment amounted to €2,083m (31 December 2023: €2,346m). The Group carried out an impairment assessment using a combination of internal group models and externally available data to inform their view of the recoverable amount of investment. The carrying value of the subsidiary undertaking before adjusting for impairment was €2,346m and recoverable amount based on the VIU was €2,083m resulting in €263m impairment charge (2023: €nil). See Company SOFP on page 403 for further details.

(b) Structured entities (SEs)

A structured entity is an entity in which voting or similar rights are not the dominant factor in deciding control. SEs are generally created to achieve a narrow and well-defined objective with restrictions around their on-going activities. Depending on the Group’s power to direct the relevant activities of the investee and its exposure or rights to variable returns from its involvement in the investee and the ability to use its power over the investee to affect the amount of the investor’s return, it may consolidate the entity.

Control and voting rights

The Directors of the individual SEs are independent of the Group and neither the Group nor any of its subsidiaries have voting rights in the share capital of these entities. The Group initiated the setup of these SEs and, as architect dictated the terms relating to the operation of these SEs. The Group, as administrator, provides services to the individual SEs. The Group, as administrator, has power to:

exercise rights, powers and discretions of the issuers in relation to the mortgage loans and their related security and to perform its duties in relation to the mortgage loans and their related securities: and
to do or cause to be done any and all other things which it reasonably considers necessary, convenient or incidental to the administrator of the mortgage loans and their related security or the exercise of such rights, powers and discretions.

44. Principal subsidiary undertakings and interest in subsidiaries and structured entities (continued)

The key activities performed by the Group’s subsidiaries as administrator is:

to manage the credit risk associated with the mortgages contained in the individual SEs; and
to determine and set rates of interest applicable to loans on each rate setting date in accordance with the terms of the loans and negotiate the cost of funds associated with these mortgages which may result in a variable return in the entity.

These two items highlight the power the Group has to direct the relevant activities of these entities that significantly affect the investee returns and the ability to use its power to affect variable returns of investors.

The Group provides funding to each of these vehicles by way of a subordinated loan and has an entitlement to deferred consideration. The Group is exposed to the variable returns of the SE’s through the subordinated loan and the deferred consideration.

The Group currently has four SEs in issue in the ROI the details of which are outlined below. During 2024, Fastnet Securities 14 DAC and Fastnet 15 DAC collapsed and will be going into liquidation during 2025 and Fastnet 19 was incorporated:

	Sub loan provided

SEs setup with Residential Mortgages
- Fastnet Securities 16 DAC	√
- Fastnet Securities 17 DAC	√
- Fastnet Securities 18 DAC	√
- Fastnet Securities 19 DAC	√

Although the Group does not own more than half of the voting power, it has the power to control the relevant activities of the SE and the ability to affect the variable returns of the investee and hence these SEs are consolidated. In these cases, the consideration received from the investors in the notes in the form of cash is recognised as a financial asset and a corresponding financial liability is recognised.

At 31 December 2024, restricted cash of €180m (31 December 2023: €217m) relates to cash held by the Group’s securitisation.

45. Reporting currency and exchange rates

The consolidated financial statements are presented in millions of Euro.

The following table shows the closing and average rates used by the Group for the current year-end and prior year-end:

	31 December 2024	31 December 2023

€ / £ exchange rate
Closing	0.8292	0.8691
Average	0.8450	0.8688

€ / US$ exchange rate
Closing	1.0389	1.1050
Average	1.0808	1.0830

46. Events after the reporting period

No other items, transactions or events that would materially impact the consolidated financial statements and require adjustment or disclosure to these consolidated financial statements have occurred between the reporting date of 31 December 2024 and the date of the approval of these financial statements by the Board of Directors on 3 March 2025.